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2021 (10) TMI 218 - ITAT CHENNAIAddition u/s 68 - addition towards sundry creditors as unexplained credit - non-furnishing of confirmation letter from the parties - HELD THAT:- Merely for non-furnishing of confirmation letter from the parties, genuine liability arised in normal trading activity cannot be considered as unexplained credit. But, fact remains that the assessee has put up new facts which are not available to the AO at the time of assessment proceedings, which is evident from the finding given by the ld. AO that he went on to make additions only for non-submission of confirmation letters.To ascertain the facts with regard to nature of liability and genuineness of such transactions, the matter needs to be re-examined by the AO. Addition towards liability in the name of M/s. Sridhar & Co., it was the explanation of the assessee that there was a credit and debit balance in the same party account, if both balances are netted off, then there is no difference as claimed by the AO. The assessee has filed ledger accounts of debit and credit balances. The fact needs to be verified. Hence, we set aside the issue of addition towards sundry creditors as unexplained credit and direct the AO to verify evidences filed by the assessee and decide the issue in accordance with law. Addition towards inoperative account, although the AO has made addition assessee has recovered part of liability in the subsequent financial year relevant to assessment year 2016-17 and balance amount has been written off as irrecoverable and offered to tax. The assessee has filed necessary evidences to prove that part of liability has been recovered and remaining amount was written off and credited to profit & loss account. But, fact remains that these facts were not examined by the AO and hence, this issue needs to be verified by the AO in light of evidences filed by the assessee - we set aside the issue to the file of the AO and direct him to reconsider the issue in light of various evidences filed by the assessee and decide the issue in accordance with law - Appeal filed by the assessee is treated as allowed for statistical purpose.
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