Vinodkumar Maheshwari Vs ACIT ( ITAT Rajkot)
Relevant Facts: The assessee was an individual carrying on the business of trading in ferrous & non-ferrous metal scrap through his proprietary concern, M/s Sai Metal Corporation. For AY 2022-23, he filed his return declaring income of ₹1,58,92,790 on turnover of approximately ₹166.83 crore.
The return was selected for complete scrutiny because of high liabilities compared with reported income, substantial squared-up loans & comparatively low income associated with TCS receipts from scrap transactions.
During assessment, the AO issued notices u/s 133(6) to trade creditors seeking confirmation of balances. Some creditors confirmed amounts matching the assessee’s books, while certain creditors did not respond. A difference of ₹50,000 was noticed in one account.
The AO particularly questioned long-outstanding balances, including approximately ₹48.91 lakh payable to Chetan Alloys Pvt. Ltd. & ₹2.13 crore payable to Chetan Overseas Delhi Pvt. Ltd. Since several parties did not respond directly, he treated aggregate trade creditors of ₹6,25,37,562 as unexplained u/s 68.
The AO also examined unsecured loans. Although a loan of ₹70 lakh from Harihar Cast Loan was accepted as verified, loans aggregating to ₹64,40,000 from other lenders were treated as unexplained. The AO mainly observed that the lenders’ returned income was lower than the amount advanced & complete evidence of their financial capacity was allegedly unavailable.
