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| The Tax Publishers2020 TaxPub(DT) 1066 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Since there was no proper explanation from assessee in respect of reasons recorded by AO to draw the inference that transaction was a bogus one and in the absence of any material touching on the aspect, therefore CIT(A) was justified in confirming the addition made by AO under section 68 that creditor was a bogus one.
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Income from undisclosed source - Addition under section 68 - Unexplained creditor -
Assessee was engaged in business of trading in fabric items. AO completed the assessment under section 143(3) after making addition on account of M/s M holding it to be bogus creditor because such an entity had no physical existence and not to be found in the given address and computer generated bills in this case were untrustworthy. CIT(A) upheld the action of AO. Held: It was informed by AO of the alleged creditor while transmitting Balance Sheet and the list of sundry creditors, that name of assessee was not to be found in such list. Further, inspector who tried to locate premises of M/s M could not find such an entity at the given address. There was no proper explanation from assessee in respect of reasons recorded by AO to draw the inference that transaction was a bogus one. In absence of any material touching on the aspect, CIT(A) was justified in confirming the addition.
REFERRED :
FAVOUR : Against the assessee
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 37(1)
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