Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 617 - AT - Income TaxRevision u/s 263 - genuineness of the transaction on account of sundry creditors - as per AO Assessee has incurred higher expenditure during the year thus disallowed 20% of the expenses u/s 37 - HELD THAT:- In the original assessment proceedings, AO was not precluded to make addition of the whole of the creditors or disallow the whole of the expenditure , if the details were not forthcoming from the assessee. But when the details are filed by assessee, because of the Lake of time available with the assessing officer, provisions of Section 263 cannot be invoked. For this reasons the order of CIT cannot be sustained. In the order passed by the CIT there is no inclination or finding that how the creditors are unsubstantiated. Even one creditor allegedly held to be bogus by the learned CIT, we do not find any mention in the order of the assessing officer or in the order of the CIT. There is no basis for such a finding. When the complete expenditure has been allowed by AO to the extent of 80% of those expenditure as expenditure incurred wholly and exclusively for the purposes of the business there is no question to further examine the genuineness and creditworthiness of such creditors when such creditors emerge from these expenditure only. The creditors were not the loans received by the assessee but are part of unpaid expenditure. Thus the reason given for resuming jurisdiction u/s 263 of the act to verify the genuineness and creditworthiness of the sundry creditors is also not correct. There is no provision in the act that unpaid expenditure is also to be tested on the parameter of creditworthiness. Therefore even in the assessment order the ld AO did not commit any error of law. - Decided in favour of assessee.
|