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Judgment
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1073145666(1), dated 11.02.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appears at the assessee/respondent’s behest. He is accordingly proceeded ex-parte.
2 For the reasons stated in the Revenue’s condonation averments, delay of 111 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
Coming to the Revenue’s sole substantive ground raised herein, it is noticed that it seeks to reverse the CIT(A)/NFAC’s detailed discussion deleting section 68 unexplained sundry creditor’s addition amounting to Rs.2,96,22,658/-; reading as under:
“6.0 Addition on account of sundry creditors:-
6.1During the course of assessment proceedings, on perusal of balance sheet of the assessee, it was noticed that during the year under consideration, sundry creditors have been increased from 24,69,17,607/- to Rs. 27,66,40,265/-. Therefore, vide questionnaire dated 09.11.2022, the assessee was requested to furnish the following details w.r.t sundry creditors:-
S.No. Name and address of creditor PAN Contact detail/ emailid Outstanding balance as on 01.04.2020 Addition during the year Reduction during the year Outstanding balance as on 31.03.2021 6.2In response of this, assessee uploaded its submission on 09.12.2022. The same is reproduced as under:-
“The information required vide point-2 regarding sundry creditors is enclosed herewith alongwith the copy of ledger of each party, confirmation and sample purchase invoice. It is also submitted that due to hard/tough competition in the market, Assessee have to provide long credit period to its customers for its sales and as a result also demands a long credit period from its creditors which results in a long duration of working cycle of Assessee’s business. So, this is the reason in respect of outstanding sundry creditors.”
6.3As assessee failed to establish the genuineness of the credits in his books in form of increase in sundry creditors. Therefore, show cause notice was issued to assessee 09.12.2022 and the assessee was show caused as to why an addition of Rs. 2,96,22,658/-( 27,66,40,265 -24,69,17,607) shall not be made u/s 68 of the IT Act, 1961.
6.4In response of show cause notice, no submission has been made by the assessee.
6.5Since, no submission has been made by assessee. Hence, it is assumed that assessee has no explanation in respect of the same. During the course of assessment proceedings, assessee only submitted a list of creditors and copies of ledger account. However, assessee failed to provide confirmation for the said creditors and bills/vouchers in respect of all the parties. In absence of confirmation from the creditors and supporting documentary evidences, genuineness of these transactions could not be ascertained. The onus to prove the genuineness of creditors lies upon the assessee. However, assessee failed to discharge the same. In absence of any documentary supportive evidence, addition of Rs. 2,96,22,658/-( 27,66,40,265 -24,69,17,607) is hereby made u/s 68 of the IT Act, 1961 as unexplained credits in the books of accounts of the assessee. Further, penalty proceedings u/s 271AAC in respect of aforesaid amount is also initiated.”
That being the clinching case that once the Assessing Officer had disallowed the assessee’s entire purchases amounting to Rs.17,39,16,630/- as bogus under section 69C of the Act, the very amount exceeding the impugned addition has rightly been held as deemed to have subsumed the same so as to avoid any double addition. We thus find no reason to interfere with the learned CIT(A)’s lower appellate findings deleting the impugned addition for this precise reason.
This Revenue’s appeal is hereby dismissed.