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2015 (6) TMI 1024 - HC - Income TaxAddition u/s 68 - Held that:- The Income- tax Appellate Tribunal, after considering the rival contentions and on perusal of material on record, by common order partly allowed the appeals filed by the Department and held that in respect of parties (sundry creditors) other than relating to whom additions made by the Commissioner of Income-tax (Appeals) are to be restored to the Assessing Officer by casting the initial burden on the assessee to discharge such burden by filing confirmation letters of sundry creditors and reserving liberty to the Assessing Officer to make verification of the confirmation if felt so necessary and also opining that the Assessing Officer may call upon the assessee to adduce evidence in the form of producing such parties. For the assessment year 2004-05, the matter was restored back to the file of the Assessing Officer in respect of the addition representing the closing balance of fifteen creditors with the liberty being granted to the assessee as well as the Assessing Officer as granted for the assessment year 2003-04. Addition u/s 69C - Held that:- The assessment order would also indicate that in respect of the sundry creditors as reflected in the balance-sheet of the assessee was not proved by the assessee though sufficient opportunity was granted. The order of the Assessing Officer does not indicate about any explanation having called for by the Assessing Officer from the assessee and such explanation having been not accepted so as to treat the same as income of the assessee for such financial year. However, it requires to be noticed from the order of the Tribunal that after analysing the case law it has been held that section 68 read with section 69C can be invoked in respect of the sundry creditors which are not proved by the assessee before the Assessing Officer. As such we are of the considered view that the principles contained in section 68 as well as section 69C would be squarely applicable to sundry creditors in case of a trader, as obtained in the facts of the present case. In fact, credit purchases are nothing but expenditure and if sundry credits are not proved by the assessee addition can be made by the Assessing Officer by resorting to section 69C. Accordingly, substantial question of is being answered in favour of the Revenue.
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