YASHPAL BUDHIRAJA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 1407/DEL/2016Status: DisposedITAT Delhi05 January 2017AY 2011-123 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that when purchases are accepted and details of the party's identity and transaction genuineness are provided, an addition under Section 68 is not sustainable. The addition was deleted as similar details had led to deletion in another case.

What were the facts?

The assessee had an outstanding balance from a sundry creditor, M/s L-Comps & Impex (P) Ltd, arising from credit purchases. The assessee provided confirmation, PAN, and income tax return of the creditor.

What were the issues?

Whether an addition under Section 68 is justified for a sundry creditor when the assessee provides confirmation, PAN, and IT return of the party, and purchases are accepted.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI

Before: SHRI J. SUDHAKAR REDDY

Appellant by : Sh. Mohit, Adv. Respondent by : Sh. Amrit Lal, Sr.D.R. ORDER

This is an appeal filed by the assessee directed against the order of the Ld. Commissioner of Income Tax (Appeals)-18, New Delhi dt. 29.01.2016 pertaining to the assessment year (A.Y.) 2011-12 on the following effective ground. “2. That in facts and circumstance of the case Ld.CIT(A) erred in confirming addition in respect of M/s L-Comps & Impex (P) Ltd amounting to Rs.3,32,189/- without considering the confirmation, income tax return and copy of PAN filed during the appellate proceeding. He has erred in sustaining addition in respect of M/s L-Comps & Impex (P) Ltd. particularly when addition in respect of M/s Cosmos International on the same ground was deleted.”

2.

The addition in question that is in dispute is an outstanding balance from M/s L-Comps & Impex (P) Ltd which is a sundry creditor. This credit arises on account of certain credit purchases made by the assessee. The assessee has furnished the confirmation from the party, its PAN ITA 1407/Del/2016 A.Y. 2011-12 Shri Yashpal Budhiraja, New Delhi number and copy of the income tax return of this party. The First Appellate Authority had on similar details filed in the case of M/s Cosmos International Limited, which is another sundry creditor, deleted the addition. Under such circumstances, the addition sustained in this case has to be necessarily deleted. This is a case of sundry creditor arising out of purchases. When the purchases are accepted and details have been filed as regards the identity of the party and genuineness of the transaction, and when bills and vouchers evidencing the purchases have been furnished, the addition cannot be made under section 68 of the Act. Thus this edition is hereby deleted.

3.

In the result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Open Court on 05th January, 2017.

Sd/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER Dated: the 05th January, 2017. *manga

ITA 1407/Del/2016 A.Y. 2011-12 Shri Yashpal Budhiraja, New Delhi

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