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Shri Hazi Mohd. Irfan, s/o. Raham Ilahi Versus The Income Tax Officer, Ward-1 (3) , Ghaziabad

2017 (11) TMI 387 - ITAT DELHI

Addition of unsecured loans - proof of identity of creditors - Held that:- In the present case, the return of income of the creditors would show that they have declared small income and paid meagre tax. In their bank accounts, there was meagre bank balance prior to giving loan to the assessee and cash have been deposited immediately before giving loan to the assessee. Further, assessee failed to produce any of the creditor before A.O. for examination to verify genuineness of transaction. Therefo .....

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reconsideration at the level of the A.O. Accordingly, set aside the orders of the authorities below and restore this issue to the file of the A.O. with a direction to re-decide this issue by verifying the facts from the invoices by appreciating the explanation of assessee. In case, A.O. has any doubt, he could have verify the facts from the concerned parties as per Law. - Difference in closing stock - Held that:- In view of the above findings and material available on record and same openin .....

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e Revenue : Shri Kaushlendra Tiwari, Sr. D.R. ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A), Ghaziabad, dated 30.11.2016 for the A.Y. 2012-2013. 2. Briefly the facts of the case are that the return of income has been filed on 21st September, 2012 declaring income of ₹ 4,47,293/-. The assessee is running a proprietary concern namely M/s. Reena Steel Trading in scrap. The case was selected for scrutiny. The A.O. passed the order under section 143(3) date .....

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on record. All the issues are decided as under. ISSUE NO.1 - UNSECURED LOANS : 4. During the course of assessment proceedings, it has been noticed that assessee has received unsecured loans from the following persons. 1. Ms. Gulista Begum Rs.1,50,000 2. Mohd. Shahbaz ₹ 1,45,000 3. Ms. Sabnam Begum ₹ 50,000 4. Mrs. Praveen Begum ₹ 1,00,000 5. Shri Jahangir ₹ 50,000 6. Mohd. Shahnawaz ₹ 2,50,000 4.1. The A.O. noted that information was called for from the above person .....

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ons in the matter and accordingly, made the addition. 4.2. The assessee submitted before Ld. CIT(A) that addition has been made because the creditors have not been produced before A.O. for examination. However, the assessee provided copy of their income tax returns, copy of ledger account of unsecured loan, copy of balance sheet and copy of the bank account of the creditors. Therefore, burden upon assessee to prove identity of the creditors, their creditworthiness and genuineness of the transact .....

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assessee failed to prove genuine credit in the matter. The appeal was accordingly dismissed. 5. After considering the rival contentions, I do not find any merit in this ground of appeal of assessee. The Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that all the documents were produced to the satisfaction of the A.O, therefore, no additions should be made. He has relied upon the order of ITAT, Lucknow Bench (Third Member) in the case o .....

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e authorities below in the light of submissions of the parties, I am of the view that no interference is called for in the matter. The assessee produced copy of the income tax return, copy of the ledger account, copy of the balance sheet and bank account of the creditors before A.O. However, no confirmation from the creditors have been filed. It is also an admitted fact that before giving loans to the assessee, there are cash deposits in all the accounts of the creditors. The ITAT, Agra Bench in .....

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e Hon ble Gujrat High Court in the case of Blessing Construction vs. ITO 32 taxmann.com 366 held that where sizeable amounts were deposited in cash in account of depositors only before their withdrawal through cheques in favour of the assessee, addition was justified . In the present case, the return of income of the creditors would show that they have declared small income and paid meagre tax. In their bank accounts, there was meagre bank balance prior to giving loan to the assessee and cash ha .....

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ground of appeal of assessee is dismissed. ISSUE NO.2 - BOGUS PURCHASES : 8. The A.O. asked the assessee to furnish bills and vouchers of purchases made during assessment year under appeal. The assessee has furnished the list of party-wise purchase as well as photo copies of the purchase bills. The assessee has furnished photo copy of the purchase bills to the tune of ₹ 10,42,500 from M/s. H.K. Steel Traders, Ghaziabad bearing different bills and M/s. Trilok Tripurari Trading Co. Achechja, .....

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her. The assessee explained before A.O. that total bills amount are duly recorded in the books of account. The party from which assessee purchased material mentioning in Kg but written MT while in MT he should point out 8.690 MT but they have written 8690 MT which is a mistake due to illiteracy of the party. The assessee purchased material of 8.690 MT or can say 8690 Kg. The A.O. however, did not accept the explanation of assessee and made the addition on account of bogus purchases of ₹ 13 .....

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onsideration at the level of the A.O. Learned Counsel for the Assessee submitted that it was a clerical mistake in noting the items in Kg or MT. All purchase invoices and material have been produced before the authorities below. He has also referred to invoices, copies of which are filed in the paper book. 10. The Ld. D.R. submitted that the matter may be remanded to the A.O. for re-consideration. 11. In view of the above, it is clear that assessee has specifically explained the discrepancy in n .....

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