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2012 (8) TMI 674 - ITAT, CHENNAIAddition u/s 68 made for purchases disbelieved on ground of alleged inability of assessee to prove trade creditors appearing in its books - self made vouchers - assessee being a wholesale grain merchant - Held that:- Keeping in mind the nature of business, preponderance of probability is that the purchases were from agriculturists. It would not generally be possible to obtain bills from agriculturists and therefore, the best that could be done in such circumstances was to have self-made vouchers. No defect in such self-vouchers has been pointed out. Further, application of Section 68 is called for only where any credit balance stands unproved. In present case, there were no trade credit balances at all. In view of aforesaid, dis-allowance stands deleted. Addition u/s 40A(3) - Held that:- There is no finding by the A.O. that payment made to Shri Annadurai was for any purchase at all. If Section 40A(3) has to be applied, there should be a finding that the payment was in relation to an expenditure. As long as this finding is not there, application of said Section is not called for at all. Interest dis-allowance - Held that:- As long as the credits were not questioned, interest alone could not have been disallowed. Just for a reason that partners’ current account was showing a debit balance, interest expenses could not have been disallowed. Dis-allowance made out of Cooly and Delivery charges claimed - Held that:- Defects in vouchers produced by the assessee were not pointed out. Generalised reasons for disallowances cannot stand the test of reason - Decided in favor of assessee
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