Shiv Hari Singla Vs ITO (ITAT Delhi)
Sundry Creditors Not Bogus When Purchases & Sales Accepted – ITAT Delhi Deletes Addition of ₹3.36 Cr
Assessee, an individual contractor engaged in installation, erection & maintenance of air-conditioning systems for MES & private parties, declared income of ₹13.37 lakh with turnover of ₹6.44 crore. AO during scrutiny noted huge sundry creditors of ₹9.06 crore & treated balances of four parties (₹3.36 crore) as bogus since notices issued u/s 131 were unserved & Inspector reported shops as closed. AO added this sum as income from undisclosed sources, assessing total income at ₹3.62 crore.
CIT(A) partly allowed Assessee’s appeal but confirmed addition of ₹3.36 crore holding purchases from the four creditors as not proved.
Assessee’s Arguments before Tribunal
- Books were produced & accepted, no defects pointed out.
- Trading results & sales were accepted; hence corresponding purchases cannot be disallowed.
- Detailed evidences filed including ledgers, invoices, VAT returns, challans evidencing movement of goods, confirmations & affidavits of creditors.
- During remand proceedings creditors themselves replied u/s 133(6), confirming supplies & outstanding balances; VAT Department also verified their returns.
- Part-payments were made later through banking channel; in one case, creditor even sued for recovery of dues.
Revenue’s Stand
