AKSHAYA KUMAR SAMANTA,ANGUL vs. CIT(A)-2, BHUBANESWAR, BHUBANESWAR

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ITA 284/CTK/2019Status: DisposedITAT Cuttack10 June 2020AY 2016-174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that once the assessee furnished confirmations, the onus shifted to the Assessing Officer to verify them, for instance, by issuing notices under Section 133(6). Since the AO made no independent inquiry, the addition was unjustified.

What were the facts?

The Assessing Officer added Rs. 11,53,411/- to the assessee's income as unexplained sundry creditors, as the assessee failed to furnish duly signed confirmations from these creditors. The CIT(A) confirmed this addition.

What were the issues?

Whether the addition of sundry creditors under Section 68 is justified when the assessee has provided confirmations and the AO has not conducted further inquiry.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG & LAXMI PRASAD SAHU

For Appellant: Shri P.R.Mohanty, AR
For Respondent: Shri D.K.Pradhan, DR
Pronounced: 10/06/2020

O R D E R Per C.M.Garg,JM

This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar dated 18.6.2019 for the assessment year 2016-17.

2.

The effective issue involved in this appeal is that the ld CIT(A) was not justified in confirming the addition of Rs.11,53,411/- u/s. 68 of the Act without giving an opportunity to the assessee.

3.

The facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee had shown sundry creditors of Rs.1,50,14,734/-. The Assessing Officer required the assessee to furnish confirmations from all creditors. Although the assessee furnished details of sundry creditors outstanding as on 31.3.2016 but on examination, the AO found

P a g e 1 | 4 84/CTK/201 9 Assessm ent Y ear : 20 16- 17 that the assessee failed to furnish confirmations duly signed by the creditors in order to substantiate their creditworthiness and trustworthiness as under:

1.

Shnri Suryakanat Samal Rs.1,64,945/- 2. Sri Ajay Kumar Pradhan Rs.2,09,196/- 3. Sri Ajay Das Rs.2,13,433/- 4. Sri Binod Sahu Rs.2,06,974/- 5. Sri Arupananda Patnaik Rs.3,58,863/- Total: Rs.11,53,411/- Therefore, the AO treated Rs.11,53,411/- as unexplained credit of the assessee and added the same to the total income of the assessee u/s.68 of the Act.

4.

On appeal, the ld CIT(A) also, the assessee could not furnish confirmations of the creditors as noted by the AO. Therefore, the ld CIT(A) confirmed the action of the AO.

5.

Ld A.R. of the assessee submitted that the confirmations from the creditors i.e. Suryakanta Samal dated 6.12.2018 of Rs.1,64,945/-, Binod Sahu dated 6.12.2018 of Rs.2,06,974/-, Ajay Das dated 6.12.2018 dated 2.13.433/-, Ajay Kumar Pradhan dated 7.12.2018 of Rs.2,09,196 and Arupanda Patnaik dated 6.12.2018 of Rs.3,58,863/- mentioning their respective PAN numbers were submitted to the Assessing Officer. He submitted that if the Assessing Officer had any doubt about the confirmations given by the creditors, he could have summoned them by issuing notice u/s.133(6) of the Act to divulge the truth.

Without doing the onus lay on the Assessing Officer, the addition is made on the P a g e 2 | 4 84/CTK/201 9 Assessm ent Y ear : 20 16- 17 basis of surmises and conjectures. Ld A.R. also furnished name and full address of the creditors with their PAN before the Bench as well as e-proceedings filed before the Income tax Department. Ld A.R. submitted that the addition made by the AO is not justified.

6.

Replying to above, ld DR supported the orders of lower authorities and further submitted that the assessee could not produce confirmations from all the five creditors before the AO. Therefore, the authorities below were justified in making the addition.

7.

We have heard the rival submissions and perused the record of the case.

We observe that the Assessing Officer has made addition for want of confirmations from five creditors. From the paper book filed by ld A.R. of the assessee, we find that the assessee has filed confirmations before the Assessing Officer on various dates. Once the assessee has discharged its responsibility by filing confirmations, the responsibility shifted to the Assessing Officer to issue notice u/s.133(6) of the Act to the creditors to appear before him to counter the confirmations. It is not the case of the Assessing Officer that he has issued any notices u/s 133(6) of the Act to the parties which were returned back unserved or that the creditors are not available. The Assessing Officer, after going through the confirmations furnished by the assessee sat with folded hands and did not make any effort and not made any independent enquiry and made the addition. Once the assessee satisfies the initial onus cast on it, the burden shifts to the Revenue. However, in the instant

P a g e 3 | 4 84/CTK/201 9 Assessm ent Y ear : 20 16- 17 case, it appears that the Assessing Officer has not done his job properly.

Therefore, we do not see any plausible ground to make the addition, which is hereby deleted.

8.

In the result, appeal of the assessee is allowed.

Order pronounced on 10 /06/2020.

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