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2013 (6) TMI 17 - HC - Income TaxDisallowance of unsubstantiated sundry creditors - ITAT deleted the addition - ex-parte assessments been made u/s 144 due to non-cooperation of the assessee - Held that:- There was no cooperation by the assessee before the AO. On 01.12.2005, the balance sheet and profit & loss account were filed. The balance sheet filed with the return shows sundry creditors to the turn of Rs. 23,14,417/-. These creditors are not verifiable in absence of their full names and complete addresses. As per balance sheet the details of creditors appears available "as per Schedule C", but no such schedule attached therewith. The perusal of record shows that right from start of firm business the assessee though mentioning (in balance sheet) about availability of details of creditors as per preschedule but no such schedule has ever been enclosed with the audit report/return. Bogus liability has been created in the garb of sundry creditors whose name & balances are not known to assessee. This also indicates that no regular books of account have been maintained by the assessee, as not a single detail from the books of account has been furnished in the past fifteen months. The creditors are, therefore, not verifiable. The assessee must be held to have failed to establish that the unexplained sundry creditors were referable to the business income. The addition of the unexplained sundry creditors as income from other sources by the AO, therefore, was held valid. Case of CIT vs. Devi Prasad Vishwanath Prasad [1968 (8) TMI 5 - SUPREME Court] observed that where there is an unexplained credit, it is open to the AO to hold that it is income of the assessee, and no further burden lies on the AO to show that the income is from any particular source - order passed by the Tribunal set aside and remit the matter back with a direction to examine the identity, creditworthiness and genuineness of the transactions of the sundry creditors - in favour of revenue for statistical purpose.
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