Case Law Details
ACIT Vs HN Agri Serve P. Ltd (ITAT Amritsar)
ITAT Amritsar held that section 68 of the Income Tax Act is not empowered to allow addition of sundry debtors/ advance to growers. Accordingly, addition of the same deleted.
Facts- The assessee is a dealer of fresh fruits and commission agent besides under a cold storage plant. In the preceding year for A.Y. 2016-17, the sundry debtors amount of Rs.6,14,67,226/- was reflected in the books of account of the assessee which was finally reflected in the final accounts. The assessee having paid advance to the farmers for purchasing of fresh fruit, for the impugned assessment year, the said advance was returned back by the farmers after the declaration of demonetisation. And the advance amount so returned back to the assessee, was deposited by the assessee in the bank account in Jammu & Kashmir Bank, Branch Lassipora Pulwama, Kashmir and Azadpur, New Delhi Branch.
The total amount deposited in bank account being Rs.6,45,50,000/, Rs. 42,50,000 was deposited in the Pulwama Branch & Rs. 6,03,00,000/- in New Delhi Branch. And, as per the information from bankers, Rs.32,50,000/, was demonetised currency (SBN) and the rest amount was deposited on the normal currency. Also, to consider the demand of the parties, the cash was immediately received from the total 156 farmers to maintain the business liaison.
During the assessment, the details of transactions were submitted before the AO, following which a notice u/s 133(6) was issued to 60 debtors. Later, though the confirmation from party was filed & reason well explained, both the authorities refused to accept the argument of the assessee & confirmed the amount of Rs. 5,03,336/, with the total addition made U/s 68 of the Income Tax Act by the AO amounting to Rs.6,33,46,052/, along with the tax charged U/s 115BBE of the Income Tax Act.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
