INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Genuineness of purchases made by assessee - AO was directed to consider the material placed before him

Assessee was manufacturer of electromagnetic equipment used for environmental testing of vibrations. A notice was issued under section 143(2) and assessee was directed to furnish certain details with regard to balance confirmation of creditors with closing balance above Rs. 50,000. The same was complied with. However, the balance confirmation in respect of four companies aggregating to Rs. 1,38,452, were disallowed, under section 68. Assessee contended that AO had committed an error in disallowing the same. Sufficient material existed in order to indicate that all the purchases were genuine. Held: AO should have considered the material produced before him, which have also been enclosed with instant appeal. On a specific question being asked to revenue whether the four bills of creditors referred to therein have been produced before AO, it was submitted that he did not have complete information with regard to the same. On considering these four bills, if the same were placed for consideration before AO, then he might have come to a different conclusion than what he had arrived at. Therefore, it would be just and appropriate to direct AO to reconsider the matter afresh by considering these four bills, which were produced by assessee.

Followed:Crescent Control Pvt. Ltd. v. ACIT [ITA No. 2614/Del/2012, dt. 28-9-2012]

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. :

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