INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Absence of reconciliation of difference in creditor's account, which was shown excess credit balance -

AO made addition under head 'sundry creditors as assessee did not furnish confirmation letters from sundry creditors in respect of outstanding balance of Rs. 2,38,22,971. AO treated 20% of unproved credits of Rs. 2,38,22,971, which worked out to Rs. 47,64,594 and added back to income. On appeal, CIT(A) held that assessee failed to reconcile balance, (excessive credit balance shown in the hands of certain party) and confirmed addition of Rs. 25,00,000. Held: When CIT(A) gave a clear finding that assessee failed to produce purchases book, stock register etc. to verify purchases or unaccounted sales, assessee took a different stand before Tribunal and argued that difference was not related to purchase and sales and it was due to the amounts received and supplies made to creditor. In any case there was a difference in creditors account which was shown excess credit balance and in absence of proper reconciliation and source, entire difference of credit balance was required to be brought to tax.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 250

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