New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 745 - ITAT VISAKHAPATNAM

2016 (3) TMI 745 - ITAT VISAKHAPATNAM - TMI - Additions towards trade creditors u/s 68 - assessee has not proved the genuineness of the transactions - Held that:- On perusal of the records, we find that when ITI caused enquiries, the creditors have denied any business transaction with the assessee. Therefore, the basic requirement of genuineness of the transaction is absent. Though, the assessee claims that he has furnished confirmation letters before the A.O. as well as CIT(A), no such findings .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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(A). - Decided against assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has not filed any evidence to counter the findings of the facts recorded by the CIT(A). Therefore, we are of the opinion that the CIT(A) has rightly restricted the additions to ₹ 30,000/- and we do not see any reason to interfere in the order of CIT(A). - Decided against assessee - I.T.A.No.417/Vizag/2013, I.T.A.No.418/Vizag/2013 - Dated:- 5-2-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as listed by the A.O. in his order have not confirmed any business transaction with the assessee firm. Therefore, the A.O. held that the assessee has not proved very genuineness of the transaction and hence, a sum of ₹ 8,54,752/- was added as unexplained cash credit u/s 68 of the Act. Similarly, the A.O. noticed that the assessee has debited various expenditures under the head freight charges, loading charges and coolie expenses. To substantiate the claim, the assessee was asked to furnis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

owed 15% of such expenditures and added to the total income. 3. Aggrieved by the assessment order, the assessee preferred 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 reputa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re not genuine. Similarly, with regard to adhoc disallowance on expenditure, the assessee submitted that the A.O. has made 15% disallowance of such expenditure which is of higher side, therefore requested to scale down the disallowance to 5%. The CIT(A), however after considering the submissions of the assessee confirmed the additions made towards trade creditors u/s 68 of the Act. While doing so, the CIT was of the opinion that the A.O. has rightly made the additions, as the assessee has not pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4. Aggrieved by the CIT(A) s order, the assessee is in appeal before us and raised the following grounds: 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts of the case and also the law applicable. 2. The learned Commissioner of Income Tax (Appeals) is not justified In confirming the addition of ₹ 8,54,752/- made by the assessing officer towards alleged unexplained investment with regard to credits in the account of farmers who supplied paddy to the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r of Income Tax (Appeals) is not justified in assuming that there is a close nexus between the appellant and the farmers and ignoring the overwhelming evidence in favor of the appellant in the form of confirmation Fetters and also the details of land holdings of the farmers. 6. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining to the extent of Rs,30000 the ad hoc disallowance made by the assessing officer @15% of the other expenses claimed by the appellant. 7. Any o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cts properly simply made additions based on the ITI s report. The A.R. further submitted that when the ITI visited the farmers, they were not available immediately, however, all the farmers have confirmed the transactions with the assessee by filing the confirmation letters. Therefore, the A.O. was not correct in brushed aside evidences filed in the form of confirmation letters and also merely relied upon ITI report for making the additions. Similarly, as far as the disallowance of expenditure i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ideration 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, therefore, the assessee failed to prove the very genuineness of the transactions. It is the contention of the assessee that he has furnished confirmation letters from the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A.O. as well as CIT(A). However, the A.O. as well as CIT(A) have brushed aside the evidences filed by the assessee and made the additions merely based on the ITI s report. 7. We have gone through the orders of the lower authorities and submissions made by the assessee. On perusal of the records, we find that when ITI caused enquiries, the creditors have denied any business transaction with the assessee. Therefore, the basic requirement of genuineness of the transaction is absent. Though, the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ith 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version