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| The Tax Publishers2019 TaxPub(DT) 8430 (Kol-Trib) INCOME TAX ACT, 1961
Section 69C
When sundry creditors were linked to purchases done by assessee and the purchases were not doubted then in such circumstances entire sum due to sundry creditors cannot be added in hands of assessee merely because the sundry creditors did not respond to notice under section 133(6).
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Income from undisclosed sources - Bogus purchases - Sundry creditors relating to purchases - No response to section 133(6) notice--No doubt as regards related purchases
AO treated sundry creditors amounting to Rs. 66 lakhs as bogus on the ground of creditors not having responded to notice under section 133(6) and accordingly, made addition under section 68.Held: As evident sundry creditors were linked with purchases done by assessee and purchases were not doubted by AO. Assessee`s books of accounts were audited by a chartered accountant. And same had not been rejected by AO. Once transaction got completed, it might happen that creditor might not cooperate in income tax proceedings and did not respond to notice under section 133(6) issued by AO but this could not be a reason to treat sundry creditors as bogus. Accordingly, no addition could be made.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 68
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