GLOTTIS,CHENNAI vs. ACIT NON CORPORATE CIRCLE 11, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -13, Chennai, dated 30.03.2017 and pertains to assessment year 2014-15.

The only issue arises for consideration is addition made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 (in short 'the Act').

We heard Shri Paul Sundar Raj, the Ld. representative for the assessee and Ms. S. Vijayaprabha, the Ld. Departmental Representative. From the orders of the authorities below it appears that the Assessing Officer made three additions under Section 68 of the Act. The Assessing Officer made addition of ₹37,30,340/- on account of non-receipt of confirmation letter from the creditors. The Assessing Officer also made an addition of ₹17,65,330/- on the ground that there was no evidence of transaction. The Assessing Officer made one more addition of ₹1,30,79,007/- being the difference between the books of account.

Having heard the Ld. representative for the assessee and Revenue, this Tribunal is of the considered opinion that an opportunity should be given to the assessee to prove the creditworthiness of creditors, genuineness of the transaction and identity of the creditors. The assessee claims before this Tribunal that the confirmation letter could not be filed since some of the creditors left the business and premises. If that is so, there is no necessity for the assessee to repay the credits. The assessee also claims that some of the credits were refunded to the respective persons. However, no evidence is available on record. In those circumstances, this Tribunal is of the considered opinion that the matter needs to be re-examined. Accordingly, orders of both the authorities below are set aside and the additions made by the Assessing Officer are remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter on the basis of the confirmation letters and other material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.