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2021 (8) TMI 373 - ITAT BANGALOREAddition u/s 68 - whether unpaid trade creditors could be added u/s 68 of the Act has been examined by various courts? - HELD THAT:- Outstanding balances related to the purchases made during the year under consideration and not brought forward balances. AO did not get reply from both the trade creditors and hence he proceeded to assess the outstanding balances, while accepting the purchases made during the year & payments made during the year. AO has made the addition u/s 68 of the Act and did not invoke provisions of sec. 41(1) of the Act. On the contrary, the assessee has shown that the payments have been made in the succeeding year through banking channels. Accordingly, we are of the view that the revenue could not rely upon the decision rendered in the case of Sureshkumar T Jain. Under these set of facts, we are of the view that the AO could not have made addition of trade creditors u/s 68 of the Act. We set aside the order passed by Ld CIT(A) and direct the AO to delete the impugned addition of trade creditors. Though the assessee has raised legal ground challenging the validity of reopening of assessment, A.R said that he will not press the same, if the appeal of the assessee is allowed on merits. Appeal of the assessee is allowed.
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