Jankey Polymers Vs ITO (ITAT Chandigarh)
The appeal concerns additions made under section 68 of the Income-tax Act for Assessment Year 2012–13 in the case of a partnership firm engaged in manufacturing plastic mounded items. The assessee filed a NIL return after claiming deduction under section 80IC. The case was selected for scrutiny, and the Assessing Officer (AO) added ₹40 lakh on the ground that the assessee failed to establish the genuineness, creditworthiness, and identity of four creditors: Balkishan Damani HUF (₹18 lakh), Chunni Lal Kothari HUF (₹7 lakh), Kanhaiyalal Rathor HUF (₹10 lakh), and Smt. Sushma Kabra (₹5 lakh).
Before the AO, the assessee furnished certain details but did not provide sufficient documentary evidence for the three HUF creditors. The AO, not satisfied with the information, made the addition. The assessee appealed to the CIT(A), who upheld the AO’s action, noting particularly that Balkishan Damani HUF had an opening balance of only ₹2,403 and that deposits preceding the loan lacked supporting explanation. No balance sheets, statements of affairs, capital accounts, loan ledgers, bank trails, or confirmations were furnished for these three HUFs. The CIT(A) held that the assessee had failed to prove creditworthiness and genuineness, and therefore confirmed the addition of ₹40 lakh.
