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| The Tax Publishers2020 TaxPub(DT) 2438 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
Where assessee by filing confirmations of creditors and copies of bank statements, etc., discharged onus of proving the identity and credit worthiness of sundry creditors and genuineness of purchase transactions outstanding balance of sundry creditors could not be treated as unexplained credit under section 68 merely on account of no response to section 133(6) notice issued to creditors.
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Income from undisclosed sources - Addition under section 68 - Sundry creditors balances alleged as unexplained - Reason, no response to notices issued under section 133(6)--Assessee filed confirmations and bank statements
Assessee had shown sundry creditors and to verify the same, AO issued notice under section 133(6) which returned unserved. Therefore, AO treated the same as unexplained credit and made addition under section 68. Held: Assessee by filing confirmations of creditors and copies of bank statements, etc., discharged onus of proving the identity and credit worthiness of sundry creditors and genuineness of purchase transactions. It was not a case where loans/deposits had been accepted by assessee. These were only outstanding balances as at the end of financial year in respect of purchases made during the year. All such purchases had been accepted by AO and were not doubted. Further payments of these outstanding balances were made in subsequent financial year by cheque in normal course and merely on account of no response to section 133(6) addition could not be made under section 68 as circumstances were not in control of assessee as parties might have shifted at the time of service of letter and AO had not made any further inquiry through Inspector, etc. Therefore, addition was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, INDORE BENCH
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