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2019 (11) TMI 405 - AT - Income TaxUnsecured loans - additions u/s 68 - identity and genuineness of the creditors - HELD THAT:- Opening balance could not be added on account of the fact that it has already been accepted in the immediately preceding A.Y. At the same time, the assessee has filed documentary evidence/s to prove the identity and genuineness of the creditors from whom the credits have been received during the year. They all are assessed to tax and PAN details were disclosed in the Audit report itself. The assessee has filed the copy of their ITRs as well as copy of their bank accounts. Confirmations of all these creditors have also been filed. Therefore, we are of the opinion that the Ld. CIT (A) did not commit any error in deleting this addition. Accordingly, we decline to interfere with the relief granted by the Ld. CIT (A) in this issue. This ground of the revenue is dismissed. Addition on account of sundry creditors - HELD THAT:- It is seen that in the present case, the AO did not disturb the trading results of the assessee and the books of account have not been rejected. The outstanding balances in respect of the purchases constitute only 7.95% of the purchases made during the year. Thus, it is a case where the genuineness of the sundry creditors cannot be doubted for the simple reason that either the outstanding balance is on account of opening balance or it is on account of purchases made during the year under consideration. Therefore, we hold that to the extent of ₹ 1,96,52,805.72, for which the confirmations were filed before the AO, the addition has been correctly deleted by the Ld. CIT (A) and we decline to interfere with such deletion. The assessee did not furnish confirmations of sundry creditors to the tune of ₹ 1,62,12,538.37 before the AO and to this extent the confirmations were submitted only before the Ld. CIT (A), we are of the opinion that it would be just and proper to restore this remaining addition to the extent of ₹ 1.62,12,538.37 to the file of AO with the direction that from the purchase bills to be submitted by the assessee it is to be verified that the amount outstanding is only on account of purchases and also to verify from the accounts of the assessee that the opening balance is the brought forward balance. If from such verification it is found by the AO that the outstanding balance in the name of these creditors is comprising either of opening balance or of purchases made during the year or is on account of both the opening balance and purchases made during the year under consideration then no addition should be made on this account. Needless to say, the assessee will furnish before the AO the copy of list of sundry creditors Addition relates to interest paid to bank on secured loans - HELD THAT:- The proceeds of the maturity were also deposited in the bank account of the firm and were utilized only for the purpose of business. Therefore, it has been held by the Ld. CIT (A) that such contribution was obligatory for the assessee in the course of availing loan facilities from the bank for the purpose of business only. It is observed by the Ld. CIT (A) that it was obligatory on the part of the assessee to give funds out of its capital for FDR as the assessee has been availing loan from bank. Thus, it is held by the Ld. CIT (A) that there was business purpose behind the investment and addition of ₹ 4,28,550/- was deleted. DR has placed reliance on the order of the AO while arguing on this ground. However, he could not point out any factual infirmity in the findings recorded by the Ld. CIT (A) while deleting the disallowance. Therefore, looking into the facts of the case and findings of fact recorded by the Ld. CIT (A), which could not be negated by the Department, we find no reason to disturb the findings of the Ld. CIT (A) on the issue. Appeal of the revenue stands partly allowed for statistical purposes.
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