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2018 (11) TMI 999 - ITAT INDORERejection of books of accounts - estimation of income - CIT(A) adopted 8% of net profit rate as against 10% adopted by the A.O. - Addition on account of unexplained creditor - Held that:- Unsecured loans need not necessary be used only for the purpose of purchase as one cannot deny the possibility that the unsecured loans can be used for purchase of other assets, making investment or loans and advances but if the impugned credit comes into the books of accounts then it needs to be explained about their identity, genuineness and creditworthiness. Similar is the fact of sundry creditors which are for purchase of goods or capital assets or services. The onus to prove their genuineness completely lies on the assessee. In the instant case during the assessment proceedings assessee did not cooperate with the Assessing authority and all the queries of the A.O remain unanswered. CIT(A) did not adjudicate these two issues of unexplained sundry creditors and unexplained unsecured loans by grossly taking a view that the profits are estimated as such no other addition is called for. The issues of identity, genuineness and creditworthiness of the sundry creditors at ₹ 60,42,964/- and unexplained unsecured loan of ₹ 9,48,000/- (Rs. 6,48,000/- from M/s. Amit Construction and ₹ 3,00,000/- from Shri Sheikh Allabaksh) needs to be set aside to the file of CIT(A) for afresh adjudication and if necessary a remand report may be called from the AO for verifying the facts and thereafter CIT(A) should decide as to whether the alleged amount of sundry creditors and unsecured loans are to be treated as unexplained or explained and decide accordingly. - Decided in favour of revenue for statistical purpose.
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