Goutam Chand Sandeep Pagariya Vs ITO (ITAT Chennai)
Additions U/s 69C & 68 deleted – Clerical error in Form-3CD & wrong classification of trade creditor; ex-parte CIT(A) order set aside – ITAT Chennai
In Goutam Chand Sandeep Pagariya vs ITO (A.Y. 2018-19), the AO made multiple additions including ₹1.23 crore u/s 69C based on Form-3CD entries showing payments to JP Jewellery and ₹1.32 crore u/s 68 treating alleged increase in unsecured loans as unexplained. The CIT(A) dismissed the appeal ex-parte.
The ITAT found that the Form-3CD entry was a clerical error by the auditor. Reply received from JP Jewellery to notice u/s 133(6) confirmed that no transaction existed with the assessee, and a “negative fact” cannot be proved by further evidence. Since financial statements also did not reflect such transactions, addition u/s 69C was deleted
Regarding addition u/s 68, the Tribunal observed that the AO wrongly treated a trade creditor (M/s Prakash Gold Palace) as unsecured loan, whereas reconciliation and ledger copies showed it was a purchase creditor. As documentary evidences were not properly examined and unsecured loan balances had actually decreased, the addition was deleted. Consequential interest disallowance became academic. The assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
