The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of unexplained Creditors under section 68 of the Income Tax Act,1961 when the assessee submitted Corroborative Evidence related to creditors.
Sohanraj Khimraj Kothari, the assessee challenged the action of the Revenue authorities in making the addition of Rs.1,61,960/- on account of unexplained cash credit under section 68 of the Income Tax Act.
The assessee is an individual who carries on the business of wholesale dealing in textiles. An outstanding credit balance was found in the books of account. The assessee did not file any confirmation and therefore the AO made an addition of a sum of Rs.1,61,960/- under section 68 of the Act. The CIT(A) confirmed the order of the AO.
The NFAC observed that no documentary evidence was submitted by the assessee on the ITBA portal to substantiate the claim about filing the confirmation of the creditors and the NFAC confirmed the order of the AO.
It was submitted by the assessee that the appeal was filed in physical form and the assessee made a written submission dated 18.09.2019 and 19.03.2018. Along with the written submission, the assessee had filed the confirmation of the 2 creditors. The only error was that it was filed in physical form and was not uploaded in the ITBA portal in soft form and the confirmation filed in physical form was not taken cognizance by the NFAC.
In the light of the availability of confirmation filed in physical form before the First Appellate Authority, a coram comprising of Shri N V Vasudevan, Vice President remanded the issue to the AO for consideration afresh in the light of the confirmation already filed before the First Appellate Authority in physical. The appeal of the assessee was partly allowed.
Shri Vinay K. Kulkarni, CA appeared on behalf of the assessee and Shri. Ganesh R. Ghale appeared on behalf of the revenue.
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