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2016 (5) TMI 1101 - ITAT CHENNAI

2016 (5) TMI 1101 - ITAT CHENNAI - TMI - Addition u/s.68 - plea of the assessee that though certain credits would not be proved due to the circumstances beyond the control of assessee, at least the opening balance, which is carried forward from earlier previous year and it cannot be considered as income of assessee u/s.68 in the assessment year under consideration - Held that:- In view of the judgment of Mariam Aysha V. Commissioner of Agricultural Income-Tax [1971 (7) TMI 50 - MADRAS High Court .....

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.68 cannot be applied. This view of ours is supported by the judgement of Delhi High Court in the case of Usha Stud Agricultural Farms Ltd.,[2008 (3) TMI 91 - DELHI HIGH COURT] wherein held that credit balance in the account of the assessee did not pertain to the year under consideration, the AO was not justified in making the addition u/s.68 of the Act. Hence, in our opinion, the liabilities which were not credited in the previous year relevant to the assessment year under consideration, the pr .....

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s by the Ld.CIT(A). Thus, the failure on the part of assessee is to place necessary evidence to prove the transactions u/s.68 of the Act, the lower authorities is justified in treating those credits as unexplained credit u/s.68 of the Act - Decided partly in favour of assessee for statistical purposes. - I.T.A.No.305/Mds./2016 - Dated:- 22-4-2016 - SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER For The Appellant by : Mr.K.Ravi,Advocate For The Respondent : Mr.P. .....

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ading of Raw and Wet blue Leathers. The assessee filed its return of income admitting an income of ₹ 340,080/- on 30/09/09. Subsequently a revised return was filed on 04/12/09 admitting an income of ₹ 3,77,880/-. The return of income was processed u/s 143(1) and the case was selected for scrutiny by issue of notice dated 18/08/10 u/s 143(2) of the Act. The assessee s authorized representative appeared from time to time and gave the information and explanations that were sought for by .....

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Assessing officer had completed the assessment u/s 143(3) on 31/12/2011 and made an addition of ₹ 1,38,31,660/- for the reason that the appellant could not provide the addresses, credits were not confirmed or partially confirmed, no such address and no compliance. Out of a total of 54 creditors, 20 creditors balances were added by the Assessing officer. Consequently the taxable income was determined at ₹ 1,42,09,540/- and the tax demand was determined at ₹ 61,12,750/-. Aggrieve .....

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ppeals), the assessee is in appeal before Tribunal. 4.1 The ld.A.R classified the creditors and made remarks on the below mentioned creditors as follows:- 1.Credits unconfirmed/partially confirmed Name Balance as on 31.03.2009 Amount unconfirmed Addition upheld Remarks J J Traders 603679 475000 475000 Transactions have continued in 2009-10 and later years Rajesh Corporation 283883 12555 12555 Transactions have continued in 2009-10 and later years Standard Chemicals 182000 182000 182000 Balance c .....

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Zakria 853073 853073 Account copy submitted. Death Inv. Copies with check post marking available. Total 3721528 32427 3721528 3.No such address Name Balance as on 31.03.2009 Amount unconfirmed Addition upheld Remarks Fine Leathers 610470 610470 610470 Inv copies with check post markings available Indian Hide Co., 458035 458035 458035 Inv copies with check post markings available Reliance Traders 321200 321200 321200 Inv copies with check post markings available Total 1389705 1389705 1389705 4. .....

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ve credits, certain credits are only opening balance and it cannot be considered for addition in the assessment year under consideration and prayed that the same may be deleted. For this proposition, he relied on the judgment of Delhi High Court in the case of CIT Vs. Usha Stud Agricultural Farms Ltd. reported in [2008] 301 ITR 384 (Del). 4.2 On the other hand, ld.D.R submitted that before the lower authorities, the assessee has been given ample opportunities to prove the genuineness of the abov .....

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f purview of Sec.68 of the Act in view of language of Sec.68 of the Act, as the same is found credited in the books of accounts of the assessee, maintained for in that previous year . When the assessee is not able to offer proper explanation, the same may be considered as income of assessee in the previous year relevant to the assessment year under consideration. Thus, he submitted that, the word in previous year found in the section 68, is having very significance and the same is to be consider .....

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m earlier previous year and it cannot be considered as income of assessee u/s.68 of the Act in the assessment year under consideration. The assessee has furnished the details of Opening balance and closing balance to the lower authorities, but confirmations were not furnished in respect of these impugned creditors due to the reasons explained in the remark column of the table extracted herein above produced. The contention of the Departmental Representative is that these credits are accepted by .....

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