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Issues involved: Addition of Rs. 10,00,000 on account of excess stock surrendered during survey u/s. 133A and addition of Rs. 40,44,492 on account of bogus sundry creditors.
Addition of Rs. 10,00,000 on account of excess stock surrendered during survey u/s. 133A: The Assessing Officer made the addition as the assessee surrendered Rs. 10,00,000 on account of excess stock during a survey u/s. 133A, which was not disclosed in the income tax return. The assessee contended that the statement during the survey was taken under pressure and had no evidentiary value. The Commissioner of Income Tax (Appeals) held that the addition was unjustified as no discrepancies were found in the trading account and the books of accounts were duly audited. The Tribunal affirmed this decision, citing that the statement during the survey had no evidentiary value, as per the decision of the Madras High Court in C.I.T. vs. S. Khader Khan Son. Addition of Rs. 40,44,492 on account of bogus sundry creditors: The Assessing Officer added the amount of Rs. 40,44,492 as bogus sundry creditors, stating that the assessee failed to provide confirmations from the creditors and the transactions lacked genuineness. However, the assessee submitted that confirmations were not received due to insufficient time provided by the Assessing Officer, and all necessary details were submitted during the appellate proceedings. The Commissioner of Income Tax (Appeals) found the additions unjustified, noting that all transactions were supported by vouchers and no discrepancies were found. The Tribunal upheld this decision, emphasizing that the assessee had provided all relevant details during the appellate proceedings, and the addition of unexplained sundry creditors was not sustainable. In conclusion, the Tribunal dismissed the appeal filed by the Revenue, upholding the decisions of the Commissioner of Income Tax (Appeals) in both issues.
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