Atiresh Sales Pvt. Ltd. Vs ITO (ITAT Ahmedabad)
Assessee is engaged in the business of Manufacturing and Trading of Mill Board Paper, Cone, S.S. Rolled Patta and commission agent. The assessee company filed return at income of Rs. 2,77,330/-. Assessment was completed at Rs. 61,45,700/- and made additions of RS. 58,68,368/- on account of deposits taken from three parties, whose credit worthiness was not proved.
On appeal CIT (A) held that it has been found that the loan has been taken on various dates and repayments also have been made from time to time, therefore, the repaid amount may be treated to be available with the creditor and therefore, the additions are reduced to the peak of the loan. Regarding deposits of Rs. 7,10,16,445/- CIT (A) held that assessee has not accepted the cash credits out of these funds and confirmed the addition of Rs.17,16,445/- on account of telescoping of income which is the main subject matter of the appeal before ITAT.
After considering the submission and grounds of appeal ITAT observed that assessee has neither been able to prove the creditworthiness of the depositor nor the assessee has been able to prove the genuineness of the transactions. Though assessee contended that certain amounts had been repaid by the assessee to the depositors, which was already considered by CIT (A) who observed that various amounts had been repaid by the assessee from time to time to the depositors and the addition was proportionately reduced in the case of one of parties. Peak credit of loan amount was allowed in view of ITAT order for AY 2012-13. CIT (A) rightly made observations and hence this ground of appeal is hereby dismissed. Regarding telescoping of income of Rs. 17,16,445/- ITAT observed that CIT(A) has correctly observed that the assessee had accepted fresh loans / deposits during the year and it was not the opening balance in respect of deposits taken during the previous year and therefore, no benefit of telescoping has to be allowed taking into consideration the assessee’s set of facts. Hence, this ground was also dismissed.
