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2012 (10) TMI 412 - AT - Income TaxDisallowances on account of trade creditors - assessee had done no business with them during the financial year respectively, represent only opening as balances – Held that:- Account copies of the parties as appearing in the books of account of the assessee for assessment year 2005-06, 2006-07 and 2007-08 confirm the submission of the assessee. So, it is clear that no new amount had been credited by the assessee in their accounts during the assessment year under consideration. Therefore, application of section 68 was rules out and addition cannot be made - Assessing Officer has not brought on record any evidence to prove that these parties are bogus - disallowance made on account of cash credits has been correctly deleted Additions on account of unproved trade creditors – Held that:- Additions are made on the basis of the report of the Income-tax Inspector that there is no concern by such name but the assessee had filed before the Assessing Officer purchase and sale bills of the said concerns but the books of account of that concern could not be produced - assessee had made total purchases of Rs. 1,33,39,325/- and there was a carry forward opening balance of Rs. 2,04,050/-. During the period, the assessee made payments of Rs. 1,26,09,000/- and the balance amount has been shown as trade creditor of Rs. 9,34,275/-. A confirmatory letter from M/s Oriental Leathers has also been filed alongiwth copy of account showing payments having been made to the party. The ITI’s report cannot stand in view of the above evidence - addition correctly deleted
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