Sucram Pharmaceuticals Private Limited Vs ITO (ITAT Chennai)
No Proof, No Relief -Debtors Deny, Scrap Sale Unsupported- Unsubstantiated Cash Deposits Bite Back ITAT Chennai Sustains Additions as Unexplained Money
Chennai ITAT upheld additions made u/s 69 treating certain cash deposits as unexplained. Assessee had claimed that cash deposits of ₹23.57 lakh were recoveries from sundry debtors & ₹1.15 lakh represented proceeds from scrap sales.
AO observed that while Assessee furnished a list of debtors, it failed to provide their PAN details or confirmations. Notices issued u/s 133(6) to 21 debtors were either returned unserved or resulted in categorical denials of transactions & not a single debtor confirmed Assessee’s claim. Assessee relied merely on a reconciliation of balances showing reduction in sundry debtors between AY 2015-16 & AY 2016-17 but failed to produce ledger accounts, confirmations or verifiable supporting material. In view of this, AO treated ₹23.57 lakh as unexplained investment u/s 69 & CIT(A) confirmed the addition.
As regards the alleged scrap sale of ₹1.15 lakh, AO held that no evidence was produced to support the claim. Assessee stated that the amount was received from sale of old ACs, furniture & fittings, but no bills, vouchers, or bank entries were furnished. Given the assessee’s overdrawn bank account & low cash balances, the explanation was not accepted. CIT(A) upheld the addition.
