9911796707
|
Home
Issues involved: Addition of unverified creditors and denial of deduction u/s 80HHC.
Summary: Issue 1: Addition of unverified creditors The appeal arose from the CIT(A)'s decision to uphold the addition of Rs. 14,89,000 made by the Assessing Officer concerning unverified creditors and the denial of deduction u/s 80HHC. The original assessment was conducted u/s 143(1), followed by a notice u/s 148. The Assessing Officer requested confirmatory letters from the sundry creditors, which the assessee failed to provide. Consequently, the Assessing Officer added Rs. 14.89,000 to the accounts of three creditors due to lack of verifiable information. The assessee contended that the Assessing Officer did not act on the request to issue summons u/s 131 or call for information u/s 133(vi) of the Act. The CIT(A) directed the Assessing Officer to do so, but the notices u/s 133(vi) came back with observations that the creditors did not exist at the provided addresses. The counsel for the assessee argued that the transactions were related to export activities and due to the time gap, notices could not be served at the available addresses. However, no satisfactory explanation was provided regarding the outstanding balances with the creditors. The Tribunal noted that the impugned addition was specific to the year under consideration and that the outstanding balances with the creditors were significant, indicating ongoing transactions. As the assessee failed to provide evidence that the goods purchased were used in the export business, the claim for deduction u/s 80HHC was rejected. Consequently, the appeal was dismissed. Issue 2: Denial of deduction u/s 80HHC The assessee's claim for deduction u/s 80HHC was denied due to the failure to substantiate that the goods purchased from the creditors were utilized in the export business. The Tribunal found that without such evidence, the claim for deduction could not be accepted. Therefore, in light of the facts and circumstances, both grounds of the assessee were rejected, leading to the dismissal of the appeal.
|
