Ravindra Arunachala Nadar Vs ACIT (ITAT Chennai)
Summary: The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-15, Chennai dated 27.09.2019 for assessment year 2014-15. The assessee, a partner of M/s. Om Serma Enterprises, had filed his return declaring total income of Rs.26,85,900/-. The assessment under section 143(3) was completed on 29.12.2016 determining total income at Rs.1,43,43,706/- after, inter alia, additions relating to sundry creditors under section 41(1) and unexplained credits under section 68, with tax charged under section 115BBE.
Before the CIT(A), the assessee contended that the credits were not trade credits for which any deduction had been claimed in earlier years and that the credits were not received during the relevant assessment year. According to the assessee, several balances had been brought forward from financial years 2006-07 and 2007-08 and some arose from partition of family properties. The CIT(A), however, confirmed additions relating to several creditors, principally on the basis that the assessee had not satisfactorily explained why the balances remained outstanding for several years and that the Department had not scrutinised the credits in the corresponding assessment years. Partial relief was granted in respect of the credit of Rs.25 lakhs in the name of Shri Dhanabalan and the credit of Rs.25,14,500/- relating to M/s. Om Sarma Enterprises, after supporting financial evidence and contra entries were furnished.
