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2017 (7) TMI 865 - AT - Income TaxAddition u/s 68 - Disallowance due to non verification of sundry creditors - onus to prove - Held that:- The provisions of section 68 of the Act are applied to the cash credit which has not been explained by assessee. In the instant case sundry creditors are arising out of the purchases as claimed by assessee which have been duly accepted by the Authorities Below. We also find that the provision of Sec. 41(1) of the Act cannot also be invoked at the same time. It is because the liabilities shown by the assessee have not seized to exist in the books of account. However, it is the duty of the assessee to justify its transaction on the basis of evidence which in the instant case, the assessee has failed to do so. The onus lies on assessee to justify that these are sundry creditors. In order to justify the impugned trade creditors, the assessee should produce copies of PAN, ledger copies, bills / invoices details of payments, income tax return, mode of payments etc. The arguments of assessee cannot be accepted only when he furnishes the aforesaid details. In the instant case before us the assessee has summarily failed to observe the directions issued by the Authorities Below. However, in the interest of natural justice and fair play we are inclined to restore this issue to the file of AO to give an opportunity to assessee to substantiate its claim in the light of observation as discussed. Therefore, we restore this issue to the file of AO for fresh adjudication as per law. Assessee’s appeal stands partly allowed for statistical purpose.
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