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TMI Blog2016 (5) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO") u/s. 143(3) of the Income Tax Act,1961(Hereinafter called "the Act"), for the assessment year 2007-08. 2. At the time of hearing before us, none appeared on behalf of the assessee-firm . Despite notices being sent to the assessee-firm which were duly served on the assessee-firm , there is no appearance on behalf of the assessee-firm . Therefore, we proceed to dispose of the appeal after hearing the ld. D.R. 3. The grounds raised by the assessee-firm in the memo of appeal filed with the Tribunal read as under:- "1. UNSECURED LOANS The learned A.O. erred in treating the unsecured loans received from friends & relatives as cash credit and further erred in adding the same to the income. And learned CIT(A) erred in confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 6. Aggrieved by the assessment order dated 29-12-2009 passed by the AO u/s. 143(3) of the Act, the assessee-firm filed first appeal with the CIT(A). 7. There were no submissions made by the assessee-firm before the CIT(A) neither any details / confirmations were filed before the CIT(A) despite the assessee-firm entering appearance before the CIT(A) for seeking adjournments before the CIT(A). The CIT(A) duly considered the statement of fact filed by the assessee firm attached to grounds of appeal whereby it was stated by the assessee-firm that the loans were raised from friends and relatives and no amount was returned during the year and the assessee-firm requested for further time from the AO to get the loan confirmation from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-firm has not filed any loan confirmations/details to discharge the primary onus cast u/s 68 of the Act in the assessment and/or appellate proceedings. The primary onus is on the assessee-firm to establish the identity of the creditors, creditworthiness of the creditors and genuineness of the loans of Rs. 48,23,752/- raised by the assessee-firm and stood credited in its books of accounts as per mandate of Section 68 of the Act which in our considered view , the assessee-firm has failed to discharge the burden cast on it as per provisions of Section 68 of the Act despite sufficient opportunities given to the assessee firm during the course of assessment proceedings u/s 143(2) read with Section 143(3) of the Act before the AO and the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore some payment in dispute." No details were furnished by the assessee-firm regarding details of the creditors . The AO perused the details of the purchases made during the year and creditors list and it appeared to the AO that a sum of Rs. 32,68,941/- represented running accounts . The total purchases made by the assesseefirm during the year was Rs. 61,41,240/-. The onus is on assessee-firm to substantiate the claim made by the assessee-firm. The AO made additions of the balance amount of Rs. 28,30,227/- (Rs.60,99,168/- - Rs. 32,68,941/- ) u/s 41(1) of the Act by considering the same as ceased liability ,as the assessee-firm has not furnished any details/confirmation, vide assessment order dated 29-12-2009 passed u/s 143(3) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation has been given without specific details, genuineness of the purchases claimed cannot be accepted on the face of it. The assessee-firm itself claimed that the creditors have overcharged , which itself suggests that purchases claimed are excessive and hence 10% of purchases of Rs. 61,41,240/- was considered to be excessive claim of the purchases debited in Profit and Loss Account on account of rate difference, expiry etc. and hence the additions of Rs. 28,30,227/- made by the AO was restricted to Rs. 6,14,124/- on account of purchases not proved in absence of the details furnished by the assessee-firm in respect of sundry creditors for purchases, vide orders dated 12.4.2011. 14. Aggrieved by the orders dated 12.4.2011 passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 28,30,227/- after reducing sundry creditors of Rs. 60,99.168/- as at year end from the creditors of Rs. 32,68,941/- where there was running account. The assessee-firm again chose not to file any details/clarifications before the CIT(A) and the CIT(A) made a rational estimate @10% of total purchases of Rs. 61,41,240/- towards the rate overcharging claims and the claims for expired products, there-by addition of Rs. 6,14,124/- was sustained by the CIT(A) towards purchases not proved. The Revenue went in appeal before the Tribunal,Mumbai Benches against the relief given by the CIT(A) and which appeal was dismissed by the Tribunal, Mumbai 'E' Bench in ITA No.5115/Mum/2011 vide orders dated 29-08-2012. We have carefully perused all the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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