ACIT Vs Yogesh Mulwani (ITAT Lucknow)
ITAT held that Addition under section 68 of Income Tax cannot be made for purchases as purchases is an expense which is debited in books and not a loan or deposit which is credited in books
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
This is Revenue’s appeal against the order of the ld. CIT (A)-1, Lucknow, dated 23.9.2020 for the Assessment Year 201617, raising the following grounds of appeal:
1. The Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs.1,61,64,481/- made by the AO under the head “Sundry Creditors” as the assessee failed to substantiate the genuineness and creditworthiness of the creditors.
2. The Ld. CIT(A) has erred in law and on facts by allowing relief of Rs.40,064/- under various head of expenses as the assessee himself offered the same to taxation during the assessment proceedings.
2. There is a delay of 23 days in filing of the appeal. The Revenue has filed an application dated 22.12.2020 for condonation of delay, stating therein that the appellate order dated 23.9.2020, under consideration, was received in the office of the PCIT-1, Lucknow on 1.10.2020 only; that however, there is no limitation for filing the appeal/Miscellaneous Application in view of the decision of the Hon’ble Supreme Court, vide order dated 23.3.2020 in Writ Petition (Civil) No.03/2020 owing to the situation arising on account of Civid-19 Pandemic; and that therefore, the delay in filing of the Miscellaneous Application may be condoned and the Revenue may be allowed to argue the case on merits. In view of the above, we find that there was sufficient cause for delay in filing of the appeal. Accordingly, we condone the delay and admit the appeal for hearing.
3. Apropos addition of Rs.1,61,64,481/- under the head ‘Sundry Creditors’, the ld. CIT(A) deleted the addition made by the Assessing Officer, observing as under:
“4.4 I have considered the submission of the appellant, facts mentioned in the assessment order and Remand Report and rejoinder submitted by the appellant The AO added the purchases made from these six persons (Sundry Creditors)
