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2015 (10) TMI 2561 - ITAT LUCKNOWIngenuine trade creditors - assessee submitted that records of the trade creditors were not maintained during the year because assessee had not maintained any books of accounts due to applicability of provisions of section 44AE - Held that:- Assessee had failed to give names, addresses, confirmation, bank statement and transactions details of the creditors. In the absence of these details, the claim of the assessee regarding sundry creditors is not acceptable particularly when there was no such creditor in the year ended on 31.3.2005 and the nature of business is stated to be the same. The AO has also reproduced the cash flow statement on page 3 of his assessment order which shows that against the receipt of ₹ 30.55 lacs, the assessee has shown expenses of ₹ 12.64 lacs resulting in a surplus of ₹ 17.90 lacs against which the assesee has declared income of ₹ 2.10. lacs only u/s 44AE of the Act. As per the provisions of section 44AE such income is taxable even if the assessee has not maintained books of accounts. When the assessee has shown a cash surplus of ₹ 17.92 lacs as against the declared income of ₹ 2.10 lacs such excess cash surplus has to be explained. If the assessee is claiming to have trade creditors to the tune of ₹ 9,80,000/-, he is bound to substantiate the same, if required to do so. Although the assessee is not required to maintain regular books of accounts, he is bound to furnish information regarding trade creditors if he has claimed their existence. Under these facts it cannot be accepted that the trade creditors shown by the assessee are genuine. AO has made an addition on the basis of the statement of affairs and the cash flow statement drawn and submitted by the assessee himself and hence the assessee cannot rightfully claim that he is not obliged to substantiate the same by taking shelter under the provisions of section 44AE of the Act. - Decided against assessee.
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