MEENA RAMANATHAN,TIRUCHIRAPALLI vs. ACIT, CIRCLE-3(1), TIRUCHIRAPALLI

Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 02-08-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s 254 of the Act on 28-03-2024. The assessee is aggrieved by confirmation of addition of sundry creditors and addition on unexplained deposits. Having heard rival submissions, the appeal is disposed-off as under.

On the issue of sundry creditor balance of Rs.18.54 Lacs, it was stated that this amount was due to the assessee’s husband Shri N. Ramanathan and it was only an opening balance. There was no transaction during the year. In support, ledger extracts were furnished along with a letter from Shri Ramanathan. On the issue of deposits as stated to be received from Sri Narayana Industries Yarn P. Ltd., it was stated that the deposits were outstanding from earlier years and the balance represent opening balance only. The confirmation and ledger extract was furnished in support of the same. However, Ld. AO rejected the same and added both the amounts to the income of the assessee. The Ld. CIT(A) upheld the same against which the assessee is in further appeal before us.

So far as the loan creditor is concerned, we find that the balance of Rs.18.54 Lacs is due by the assessee to her husband. Upon perusal of ledger extract as placed on Page No.9, it is evident that substantial amount has been outstanding since 01-04-2010 and there are small receipts of Rs.0.66 Lacs during this year. Therefore, entire amount could not be added as assessee’s income for this year. Even otherwise, the assessee has placed on record ledger extracts and confirmation letter which cannot be rejected on mere suspicion. Accordingly, this addition is not sustainable.