Case Law Details

Case Name : Kaypan Exports Pvt. Ltd. Vs. Income tax Officer (ITAT Mumbai)
Appeal Number : ITA No. : 2944/M/2011
Date of Judgement/Order : 10/05/2012
Related Assessment Year : 2006-07
Courts : All ITAT (4343) ITAT Mumbai (1441)

The dispute is regarding addition of Rs.14,60,052/- made by AO on account of unsecured loans from Shri Balwantbhai Grewal. There is no dispute that the said amount had been shown as loan in books of account of the assessee. Assessee could not produce any evidence to prove the identity and creditworthiness of Shri Balwantbhai Grewal who lived in UK and genuineness of transaction. Subsequently before CIT(A), assessee submitted that the amount had been wrongly entered in books and the same related to transaction of Shri Balwantbhai Grewal with the sister concern M/s. Kaypan Vanijya Pvt. Ltd.

However, assessee could not produce any material before CIT(A) to substantiate the said claim. Assessee filed confirmation from Shri Balwantbhai Grewal before CIT(A) in which only details of payment had been mentioned and no detail was given regarding the nature of transactions. Shri Balwantbhai Grewal had also not confirmed that the transaction related to sister concern. The bank account details of Shri Balwantbhai Grewal were also not given to verify the claim. There was no evidence to prove the identity and creditworthiness of Shri Balwantbhai Grewal. Under these circumstances we do not see any infirmity in the order of the CIT(A), confirming the addition made by the AO under section 68 of the Act. Accordingly we confirm the order of CIT(A).

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA No. : 2944/M/2011 – Assessment Year: 2006-07

Kaypan Exports Pvt. Ltd.

Vs.

Income tax Officer

Date of Pronouncement: 10.5.2012

O R D E R

PER RAJENDRA SINGH, AM:

This appeal by the assessee is directed against the order dated 24.1.2011 of CIT(A) for the assessment year 2006-07. The only dispute raised in this appeal is regarding addition of Rs.14,60,052/- made by the AO under section 68 of the Act.

2. The facts in brief are that the AO during the assessment proceedings noted from details of unsecured loans that the assessee had taken unsecured loan of Rs.14,60,052/- from Shri Balwantbhai Grewal during the year. The AO therefore, asked the assessee to furnish loan confirmation and copies of bank statement, balance sheet etc. of the creditors to substantiate the loans. The assessee however failed to file the above documents. The AO, therefore, concluded that the assessee had not been able to prove the identity and creditworthiness of the creditors and genuineness of transactions. The AO, therefore, treated the sum of Rs.14,60,052/- as income of the assessee under section 68 of the Act. The assessee disputed the decision of AO and submitted before CIT(A) that the impugned amount shown in the books of assessee in fact related to sister concern M/s. Kaypan Vanijya Pvt. Ltd. and had been wrongly posted in the books of the assessee as unsecured loans. The assessee filed confirmation of Shri Balwantbhai Grewal to substantiate the claim. CIT(A) however noted from the said confirmation that Shri Balwantbhai Grewal in the confirmation had only mentioned that he had forwarded Rs.14,60,052/- to the assessee in the concerned assessment year on different dates. He had not mentioned anything about nature of transactions and nothing was also mentioned about claim of the assessee that the transaction related to the sister concern. Shri Balwantbhai Grewal had also not stated that the amount represented a trade receipt. Bank account details of Shri Balwantbhai Grewal had also not been submitted to verify the claim nor was there any evidence to establish the identity of Shri Balwantbhai Grewal who stayed in UK or about his creditworthiness. CIT(A) also observed that in case amount was wrongly entered in books, the same should have been corrected in due course of time but no material was produced to show any such correction. CIT(A), therefore confirmed the addition made by AO aggrieved by which, the assessee is in appeal before the Tribunal.

3. At the time of hearing of the appeal no one appeared on behalf of the assessee to represent the case though notice for hearing had been given well in advance nor any adjournment application has been received. We, therefore, proceed to decide the appeal on the basis of material available on record and after hearing the ld. DR who placed reliance on the findings given in the orders of authorities below.

4. We have perused the records and considered the matter carefully. The dispute is regarding addition of Rs.14,60,052/- made by AO on account of unsecured loans from Shri Balwantbhai Grewal. There is no dispute that the said amount had been shown as loan in books of account of the assessee. Assessee could not produce any evidence to prove the identity and creditworthiness of Shri Balwantbhai Grewal who lived in UK and genuineness of transaction. Subsequently before CIT(A), assessee submitted that the amount had been wrongly entered in books and the same related to transaction of Shri Balwantbhai Grewal with the sister concern M/s. Kaypan Vanijya Pvt. Ltd. However, assessee could not produce any material before CIT(A) to substantiate the said claim. Assessee filed confirmation from Shri Balwantbhai Grewal before CIT(A) in which only details of payment had been mentioned and no detail was given regarding the nature of transactions. Shri Balwantbhai Grewal had also not confirmed that the transaction related to sister concern. The bank account details of Shri Balwantbhai Grewal were also not given to verify the claim. There was no evidence to prove the identity and creditworthiness of Shri Balwantbhai Grewal. Under these circumstances we do not see any infirmity in the order of the CIT(A), confirming the addition made by the AO under section 68 of the Act. Accordingly we confirm the order of CIT(A).

5. In the result, appeal of the assessee is dismissed.

Order pronounced in the open court on 10.5.2012.

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Category : Income Tax (25347)
Type : Judiciary (10118)
Tags : ITAT Judgments (4523) Section 68 (167)

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