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Thus in the interest of justice and fair play we are setting aside the issue to the file of the AO for fresh adjudication as per the provisions of law and after giving the due opportunity to the assessee.

Shanti Prime Publication Pvt. Ltd.

Section 41(1) of the Income Tax Act, 1961 in ground No. 2 is that the learned CIT (A) erred in confirming the addition made by the AO for Rs. 1,09,29,037/- on account of outstanding balance of sundry creditors.

Held that—the impugned sundry creditors for the purchases of Rs. 98,26,896/- are representing the opening balances which were carried forward from the earlier year except for 1 for the amount of Rs. 5,72,360/-. Thus it is inferred that the account of the assessee was not credited in the year under consideration. If At all the addition needs to be made under section 68 of the Act, then it can be made in the preceding previous year in which such credit was found in the books of accounts.

Accordingly, we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.

The 2nd issue raised by the assessee is that the learned CIT (A) erred in holding the disallowance of Rs. 14,25,298.00 being 1/5 of the other expenses.

Held that— The issue in the instant case relates to the expenses claimed by the assessee which have been duly elaborated before the learned CIT (A). As per the AO there was no expenses incurred by the assessee therefore he disallowed the entire expenses claimed by the assessee. However, the ld. CIT-A restricted the addition to the extent of 1/5 of the total expenses and the remaining amount was deleted.

we note that the assessee as claimed depreciation amounting to Rs. 23,32,170/- which was disallowed to the tune of 1/5 of the total expenses by the learned CIT (A). In this regard we note that the depreciation is not an expenditure but allowance which the assessee has to claim compulsory under section 32 of the Act.

Therefore, in our considered view the disallowance made by the learned CIT (A) is not sustainable.

The next issue raised by the assessee is that the learned CIT (A) erred in confirming the addition of Rs. 1,83,166/- on account of interest income.

Held that—in the interest of justice and fair play we are setting aside the issue to the file of the AO for fresh adjudication as per the provisions of law and after giving the due opportunity to the assessee. Hence the ground of appeal of the assessee is allowed for statistical purposes.M/S. SHREE SAGAR INDUSTRIES VERSUS THE ITO WARD-3, HIMANATNAGAR][2019] 17 ITCD Online (45) [ITAT AHMEDABAD]

Thus in the interest of justice and fair play we are setting aside the issue to the file of the AO for fresh adjudication as per the provisions of law and after giving the due opportunity to the assessee.

Shanti Prime Publication Pvt. Ltd.

Accordingly, we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.

The 2nd issue raised by the assessee is that the learned CIT (A) erred in holding the disallowance of Rs. 14,25,298.00 being 1/5 of the other expenses.

Therefore, in our considered view the disallowance made by the learned CIT (A) is not sustainable.

The next issue raised by the assessee is that the learned CIT (A) erred in confirming the addition of Rs. 1,83,166/- on account of interest income.