The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Assessing Officer ( AO )’s addition of Rs. 60,529 to the income of the assessee due to non-filing of evidence for discrepancies in sundry creditors’ balances.
Sha Thanmal Sukhraj Jain & Co.,the appellant-assessee,filed a return on 27.09.2012 declaring Rs.3,24,040. The case was selected for scrutiny, and the AO requested details of sundry creditors. The assessee provided names, addresses, and confirmation letters during the assessment.
The AO sent notices to 28 creditors and found a discrepancy of Rs.60,529 after receiving replies. The assessee’s explanation was rejected, and the amount was added to their income. For 24 creditors who did not respond, the assessee failed to prove their genuineness, resulting in an addition of Rs.90,79,428.
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Three notices returned unserved, leading to a further addition of Rs.29,60,999. Additionally, letters to six debtors went unserved, adding Rs.48,79,106. The total assessed income was Rs.1,81,58,926.
The assessee appealed to the First Appellate Tribunal(FAA), who, after reviewing the AO’s remand report, deleted the addition for non-verification of debtors but upheld the addition for creditors. The assessee then appealed to the tribunal.
The assessee submitted that the Rs.60,529 difference was due to calculation errors, TDS, unaccounted commission, and debit notes as explained in the documents on pages 106 & 107 of the PB.
The tribunal noted that the dispute involved verifying creditors, particularly a Rs.60,529 discrepancy. The assessee had provided reasons but lacked supporting evidence for the entries. Despite being given ample time, the assessee did not produce the required evidence, leading to the confirmation of the addition.
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The two member bench comprising Beena Pillai (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) upheld the addition of Rs. 60,529 due to the lack of evidence.
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