Case Law Details
Jupudi Venkateswara Rao Vs ITO (ITAT Visakhapatnam)
Ld.CIT(A) has given a clear finding that the assessee failed to produce the purchases book, stock register etc to verify the purchases or the unaccounted sales, the assessee has taken a different stand before the ITAT and argued that the difference was not related to purchase and sales and it was due to the amounts received and the supplies made to the creditor. In any case there was a difference in creditors account which was shown excess credit balance and in the absence of proper reconciliation and the source the entire difference of credit balance required to be brought to tax.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-2, Guntur in ITA No.401/GNT/CIT(A)-2/2016-17 dated 09.01.2019 for the Assessment Year (A.Y.)2014-15.
2. All the grounds of appeal are related to the addition made by the Assessing Officer (AO) under the head ‘sundry creditors’. During the assessment proceedings, the AO found outstanding ‘sundry creditors’ to the extent of Rs.4,52,79,448/- in sixteen cases out of which in nine cases, the outstanding balance remained the same. Fresh creditors were introduced in five cases. In the earlier year, the AO treated 20% of the sundry creditors as unproved for assessee’s failure to furnish the confirmations. In the year under consideration also, the assessee did not furnish the confirmation letters from the sundry creditors in respect of outstanding balance to the extent of Rs.2,38,22,971/-. Hence, the AO treated 20% of the unproved credits of Rs.2,38,22,971/- which worked out to Rs.47,64,594/-and added back to the income.
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