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2016 (7) TMI 240 - ITAT KOLKATAAddition u/s 68 - Held that:- AO had even treated the debit balances of sundry creditors as unexplained cash credit u/s 68 of the Act by treating them as bogus liabilities. We find that there is an arithmetical error committed by the Learned AO thereby making excess addition of ₹ 3 crores towards storage charges payable (FSWAI). We also find from the details in the paper book and the arguments of the Learned AR that the assessee had heavily transacted with a Public Sector Undertaking, a Government of India Enterprises, M/s PEC Ltd. There are certain details such as Suspense Accounts, which assessee himself had admitted in the narration that details of credits are not available and hence credited to suspense accounts. Hence the Learned AO is justified in invoking the provisions of section 68 of the Act in respect of such transactions. However, from the totality of the facts and circumstances of the case, and in view of the voluminous details filed in the paper book by the assessee, we hold that it would be fit and appropriate , in the interest of justice and fair play, to set aside all the issues raised in the grounds of appeal to the file of the Learned AO, with the following directions :- (i) No addition need to be made on the opening balances of sundry creditors (current liabilities and provisions) in the assessment year under appeal ; (ii) No addition need to be made on the debit balances of sundry creditors (current liabilities and provisions) in the assessment year under appeal ; (iii) The Learned AO to make extensive verification of current liabilities and provisions , in accordance with law, in respect of accounts where there were transactions during the year ; (iv) The Learned AO is directed to allow set off of debit balances with credit balances in respect of the same parties while deciding the issue; (v) The assessee is directed to co-operate with the Learned AO and furnish necessary evidences and documents in support of its contentions in the form of reconciliation statements, confirmation of balances etc. (vi) The assessee is also directed to adduce evidences before the Learned AO in respect of rectifications stated to have been carried out in subsequent years for the wrong credit entries made in the earlier years and also produce evidences for payments / settlements made to various creditors in subsequent years. - Decided in favour of revenue for statistical purposes.
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