WHITE METAL ALUMINIUM TRADING COMPANY,KODUNGALLUR vs. ITO, WARD-2(2), THRISSUR

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ITA 47/COCH/2024Status: DisposedITAT Cochin16 May 2025AY 2015-2016Bench: SHRI GEORGE GEORGE K. (Vice President), SHRI INTURI RAMA RAO (Accountant Member)3 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal as the assessee's counsel conceded the inability to discharge the onus of proving creditors' genuineness, identity, and creditworthiness, and could not explain the circumstances for cash payments.

What were the facts?

The appellant, a partnership firm, filed a loss return for AY 2015-16. The AO completed the assessment under Section 143(3), adding Rs. 73,16,000/- for unproved creditors and Rs. 3,97,168/- under Section 40A(3) for cash expenses. The CIT(A) confirmed these additions.

What were the issues?

The key issues were regarding the assessee's failure to prove the genuineness, identity, and creditworthiness of creditors, and to explain cash expenses challenged under Section 40A(3) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI GEORGE GEORGE K., VP & SHRI INTURI RAMA RAO, AM

For Appellant: Shri Hrithwik D.N., Advocate
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 15.05.2025Pronounced: 16.05.2025

O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 21.12.2023 for Assessment Year (AY) 2015-16.

2.

Brief facts of the case are that the appellant is a partnership firm. It is engaged in the business of wholesale trade of steel and aluminium rods and allied products. The return of income for AY 2015-16 was filed on 12.02.2016 declaring loss of Rs. 2,13,946/-. Against the said return of income, the assessment was completed by White Metal Aluminium Trading Co. the Income Tax Officer, Ward-2(2), Thrissur (hereinafter called "the AO") vide order dated 28.11.2017 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 74,64,220/-. While doing so, the AO made addition of Rs. 73,16,000/- for the alleged failure of the assessee to discharge the onus of proving the genuineness, identity and creditworthiness of the creditors and the AO also made addition of Rs. 3,97,168/- u/s. 40A(3) of the Act for expenses incurred in cash.

3.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the addition by passing a speaking order.

4.

Being aggrieved, the appellant is in appeal before us in the present appeal.

5.

During the course of hearing of the appeal the learned counsel for the assessee fairly conceded that he could not discharge the onus of proving the identify, genuineness and creditworthiness of the creditors either before the AO or before the CIT(A). Similarly, he submits that even in respect of the expenditure incurred in cash he could not explain the circumstances under which he was compelled to make the cash payments. In the above circumstance we do not find any merit in the present appeal of the assessee.

6.

In the result, appeal filed by the assessee stands dismissed.

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