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2017 (1) TMI 1451 - ITAT DELHIAddition u/s 68 - identity of creditor - reliance on information borrowed - Held that:- The decision of the AO is based on the information received from the Investigation Wing, statement given by Auditor of M/s VPC Financial Pvt. Ltd., statement of General Manager Hindustan Times Group and submission made by the assessee. The information received from the Investigation Wing is very scanty without any details of bank account and the name of the creditors. AO did not make any enquiry to reveal the real nature of the information received. Hence, the AO could ascertain the names of the creditors, only from the details given by the assessee in response to notice u/s. 148. With regard to reliability of the CA who was supposed to sign the balance sheet, the name of the company mentioned in the reply to question no. 4 mentioned in the impugned assessment order is ‘Mehul Finvest Pvt. Ltd.’ and not M/s VPC Financial Services Pvt. Ltd. Thus, the statement cannot be used as a proof regarding identity issue of the creditor. The statement of General Manager of Hindustan Times Group only indicates that there was transfer of ownership of M/s VPC Financial Services Pvt. Ltd. Thus, the identity of creditor is established. Moreover, these third party evidences are never confronted to the person confirming the transaction. The AO did not make any further enquiry to verify whether the payment made by the creditor through the banking channel is actually travelled from the coffers of the assessee. Regarding the second category of creditors, the AO did not even mention the source of information he received. No further enquiry was made about these creditors and addition has been made only the based on some assumptions. Hence, the observation of the Ld. CIT(A) that certainly, addition u/s. 68 cannot be justified with a casual approach was right. - Decided in favour of assessee.
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