ITO Vs Gold Finger Establishment (ITAT Mumbai)
ITAT Mumbai held that no addition can be made on the ground that notices issued u/s 133(6) of the Act were not replied. Accordingly, deletion of addition by CIT(A) is justified and appeal of department quashed to that extent.
Facts- The only issue challenged by the Revenue in its appeal is against the deletion of addition of Rs.1,14,16,135/- by CIT(A) as made by the AO on account of unexplained expenditure in respect of which the sundry creditors to whom the notices u/s. 133(6) of the Act were not responded. The issue raised in ground No.2 is against the violation of rule 46A of IT rules as CIT(A) has accepted the confirmations from the creditors at the appellate stage without confronting the same to the AO. The issue raised in the cross objection filed by the assessee is against the confirmation of Rs.66,09,022/- by CIT(A) as made by the AO on account of disallowance made by the AO u/s. 69C of the Act.
Conclusion- Held that we are in agreement with the reasoning of the first appellate authority that no addition can be made on the ground that notices issued u/s 133(6) of the Act were not replied. Under these facts and circumstances, we are of the opinion that the deletion of addition in respect of 4 parties as stated above aggregating to Rs.94,53,800/- is correct but in respect of the remaining two parties on whom the purchases to tune of Rs. 19,62,335/- were made on whom the notices u/s 133(6) could not be served the entire deletion is not correct as the profit has to be brought to tax on some GP basis.
