TMI Blog2016 (3) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... ation letters for having confirmed the creditors. Merely stating that he has filed confirmation letters would not sufficient compliance of the provisions of section 68 of the Act. The A.O. categorically stated that the creditors have denied the transaction with the assessee. Therefore, it is abundantly clear that the assessee has not proved the genuineness of the transactions. Once, the assessee failed to prove the initial burden casts upon him, by furnishing identity, genuineness of the transaction and credit worthiness of the creditors, the addition made by the A.O. u/s 68 of the Act should sustain. Therefore, we are of the opinion that the A.O. has rightly made the additions. The CIT(A), after considering the explanation of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by way of this common order for the sake of convenience. ITA No.417/Vizag/2013: 2. The brief facts of the case, are that the assessee is an individual involved in the business of running rice mill, filed his return of income for the assessment year 2010-11 on 14.9.2010 declaring total income of ₹ 3,91,520/-. The return of income was processed u/s 143(1) of the Income-Tax Act, 1961 (hereinafter called as the Act ) and later converted into scrutiny and accordingly, notices u/s 143(2) 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and furnished the requisite information. During the course of assessment proceedings, the A.O. noticed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an appeal before the CIT(A). Before the CIT(A), the assessee has made written submissions and stated that as regards the trade creditors, he had purchased paddy from farmers on credit and subsequently made the payment. The assessee further submitted that he is into this business from past 30 years and he is also a rice miller in and around Machilipatnam. Because of his reputation in the business, the farmers have supplied the paddy on credit and subsequently taken money. The assessee further submitted that it is not a case of the A.O. that there is a mistake in the purchase made by the assessee, but the A.O. only doubted the creditors by stating that the farmers are not available when the ITI was visited the farmers. The assessee further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessing officer towards alleged unexplained investment with regard to credits in the account of farmers who supplied paddy to the appellant. 3. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that a credit balance in books does not tantamount to investment and hence the provisions of S.68 are not applicable to the case of the appellant. 4. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that the assessing officer is not justified in giving opportunity to the appellant to rebut the contents of the report submitted by the Inspector of Income Tax. 5. The learned Commissioner of Income Tax (Appeals) is not justified in assuming that there is a close nexus betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the additions to the extent of ₹ 30,000/-, as the assessee has furnished bills vouchers in support of the expenditure debited in profit loss account. Therefore, requested to delete the additions made by the A.O. On the other hand, the Ld. D.R. strongly supported the order of CIT(A). 6. We have heard both the parties and perused the materials available on record. The first issue, came up for our consideration is additions towards trade creditors u/s 68 of the Act. The A.O. made additions of ₹ 8,54,752/- towards trade creditors, on the ground that the assessee has not proved the genuineness of the transactions. The A.O. was of the opinion that these creditors having denied any business transactions with the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation letters would not sufficient compliance of the provisions of section 68 of the Act. The A.O. categorically stated that the creditors have denied the transaction with the assessee. Therefore, it is abundantly clear that the assessee has not proved the genuineness of the transactions. Once, the assessee failed to prove the initial burden casts upon him, by furnishing identity, genuineness of the transaction and credit worthiness of the creditors, the addition made by the A.O. u/s 68 of the Act should sustain. Therefore, we are of the opinion that the A.O. has rightly made the additions. The CIT(A), after considering the explanation of the assessee, upheld the A.O. order. We do not find any error or infirmity in the order of the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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