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Additions made by AO on ground of transactions with creditors, deleted.ITAT
Additions made by AO on ground of transactions with creditors, deleted.ITAT
Assessee ran advertising agency. In assessm't AO added certain creditors, which has transaction with assessee. AO could not gather required info. On apepal CIT(A) confirmed disallowance. On apepal ITAT held, as creditors are very much reflecting in assessee's books of a/c & which was duly audited & such creditors have not reversed by assessee in his books of a/c. Thus, additons made by AO was deleted & CIT(A) was upheld. Appeal was allowed.-500505
Facts in Brief:
1. Assessee is an individual and has earned income from business of advertising agency in the name of M/s Anand Advertising.
2. In assessment proceedings, Assessing Officer added certain creditors for a value of 67,07,258/- due to non production of supporting documents and details such as confirmations from creditors, PAN of the said creditors, addresses of the creditors, transaction held with the creditors by assessee.
3. Accordingly, AO could not gather the required information u/s.133(6) (of Income Tax Act, 1961). Therefore AO has added those creditors which were not verified.
4. On appeal, CIT(A) found the difference between value shown by assessee and the confirmation given by the parties. Since the Ld AR could not reconcile the difference so Ld. CIT(A) confirmed the above disallowance.
On appeal, ITAT held as under:
5. We are inclined to delete the addition made by AO and confirmed by Ld. CIT(A) and reason for deletion is that the creditors are very much reflecting in his books of account and which was duly audited and such creditors have not reversed by assessee in his books of account. In terms of above, we allow the issue raised by assessee.
6. In the result, appeal filed by assessee is allowed.
Case Reference- Income Tax Appellate Tribunal - Kolkata Rupak Mitra., Kolkata vs Assessee
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