VILAYIL SATYAN PILLAI,DELHI vs. ITO,WARD-60(5), NEW DELHI

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ITA 972/DEL/2021Status: DisposedITAT Delhi16 October 2023AY 2013-14Bench: Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar (Accountant Member)10 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 upheld the CIT(A)'s decision to confirm the additions made by the AO. The assessee failed to discharge the primary onus of proving the genuineness of the sundry creditors and the purchases.

What were the facts?

The Assessing Officer made additions on account of sundry creditors after notices sent to them were returned unserved, indicating non-existence. The assessee failed to provide sufficient evidence to prove the genuineness of these creditors and the related purchases.

What were the issues?

Whether the assessee discharged the onus to prove the genuineness of sundry creditors and related purchases when notices were unserved and confirmations lacked details.

Which sections of the Income-tax Act were involved?

Section 133(6),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: Sh. C. M. GargDr. B. R. R. Kumar

Hearing: 17.07.2023Pronounced: 16.10.2023

ORDER Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of ld. CIT(A)-38, New Delhi dated 15.04.2019.

2.

Following grounds have been raised by the assessee:

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law as well as on facts while confirming the actions of Learned AO in making aggregate additions of Rs. 6,76,14,124/- (Rs. 1,01,51,341 + Rs. 5,74,62,873) on the alleged ground that Sundry Creditors were not proved as genuine, without realized the fact that the details of purchases were verified and accepted as genuine expenditure by Ld. AO during the course of assessment proceeding u/s 143(3) of the Income tax act, 1961.

2. That the Ld. CIT(A) has erred in law as well as on facts on confirming the addition of Rs.2,11,500/- on account of difference in the closing balance as per the confirmation received from a party and assessee's books of account, while the difference amounting to Rs.2,11,500/- was nothing, but only due to excess amount as per confirmation received from the party against the notices u/s 133(6) of the Act.

2 Vilayil Satyan Pillai 3. That the Ld. CIT(A) also failed to appreciate the facts in point no.2 of grounds of appeal in his order, that was appealed as under. "A.O has erred in law as well as on facts by not taking the Purchase bill while doubting the genuineness of outstanding balance of creditors"

4. That having regard to relied on various cited case law, Ld. CIT(A) has been erred in law and on facts in confirming the additions made by Ld.AO under section 68 of the act, alleged the unconfirmed sundry creditors not proven the genuineness of the transaction, while the provisions of section 68 are not attracted to amounts representing purchases made on credit.

5. That the Ld. CIT(A) has been erred after simply relied on report of inspector mentioned that no such party was available at the given addresses, without being relied on other evidences to verify the existence, genuineness and creditworthiness of the parties and without appreciated the other facts of parties like opening balances, nature of regular transaction in current year and status of balances in the next year etc.” Sundry Creditor:

3. The AO made addition on account of sundry creditor of Rs.6,80,14,124/-. The AO issued notices u/s 133(6) of the Income Tax Act, 1961 to 12 parties wherein all the addresses (the sundry creditors) found to be non-existing and the notices have been received unserved.

4. Before the ld. CIT(A), the assessee submitted ledger alongwith vouchers in support of his claim. The ld. CIT(A) held that the assessee did not prove the purchases as genuine and hence affirmed the action of Assessing Officer.

5.

We have gone through the balance sheet of the assessee and also the proprietary concern, the same is reproduced as under:

3 Vilayil Satyan Pillai  Balance sheet of the assessee

 P&L Account of the assessee

4 Vilayil Satyan Pillai  Balance sheet of the Proprietary concern of the assessee

5 Vilayil Satyan Pillai  P&L Account of the Proprietary concern of the assessee

6 Vilayil Satyan Pillai  Balance sheet of the Proprietary concern of the assessee

7 Vilayil Satyan Pillai  P&L Account of the Proprietary concern of the assessee

6.

Before us, the assessee at page no. 19 to 44 of paper book submitted the confirmations without quoting any PAN number or any other details. The signing authority have not been identified. From the confirmations, the signature of the persons is as under:

7.

The assessee has not submitted any details of movement of goods, receipt of the goods. No evidences to prove the genuineness of the purchases have been provided to the revenue authorities. The assessee has failed to discharge the primary onus casted upon him and hence, we decline to interfere with the order of the ld. CIT(A).

8.

In the result, the appeal of the assessee on this ground is dismissed.

Difference in the Closing Stock: (Rs.2,11,500/-)

9.

In the interest of justice, the assessee is given another opportunity to furnish reconciliation statement before the AO who shall consider the same before taking a decision.

10 Vilayil Satyan Pillai 10. In the result, the appeal of the assessee is dismissed. Order Pronounced in the Open Court on 16/10/2023.

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