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| The Tax Publishers2020 TaxPub(DT) 2655 (Del-Trib) : (2021) 186 ITD 0473 : (2020) 083 ITR (Trib) 0415 INCOME TAX ACT, 1961
Section 68
Once purchases had been accepted as genuine and no adverse inference had been drawn, AO was not at all justified in making addition under section 68 of the balance outstanding as on 31-3-2004.
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Income from undisclosed sources - Addition under section 68 - Credit balance appearing in balance sheet - Entire credit balance being outcome of purchases accepted as genuine
AO required assessee to explain sundry creditors appearing in the balance sheet as on 31-3-2004. Assessee merely submitted name of parties along with addresses. Notices under section 133(6) were issued, but many of the parties on the basis of addresses given, out of which majority were not complied with. Accordingly, AO made addition under section 68.Held: AO simply added the balance of creditors as on 31-3-2004 without realizing that entire credit balance was the outcome of purchases made during the year. it was undisputed that in the immediately succeeding year outstanding had been paid by the assessee and once purchases had been accepted as genuine and no adverse inference had been drawn, AO was not at all justified in making addition of the balance outstanding as on 31-3-2004.
Supported by:Manoj Aggarwal v. Dy. CIT (Del) (SB) (2009) 113 ITD 377 (Del-Trib) : 2009 TaxPub(DT) 672 (Del-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2004-05
INCOME TAX ACT, 1961
Section 68
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