ITAT restored the matter to AO to consider additional evidence
ITAT restored the matter to AO to consider additional evidence
Assessee had shown purchases of Rs 64,70,932 and sundry creditors at Rs. 40,22,864. To verify their genuineness, AO issued letters to some parties u/s 133(6) (of Income Tax Act, 1961). Some letters were returned unserved. AO made addition on unproved/inflated purchases, and on account of cessation of liability u/s 41(1) (of Income Tax Act, 1961) in case of one party. CIT(A) confirmed additions. ITAT restored the matter to AO to consider additional evidence filed by assessee.-500614
1. Assessee was in the business of manufacturing plastic goods.
2. In the books of accounts, the assessee had shown gross profit @23.77% as against gross profit @ 29.69% in the preceding year.
3. AO noted that assessee had shown purchases of Rs. 64,70,932 and sundry creditors at Rs. 40,22,864.
4. In order to verify the genuineness of the purchase and sundry creditors he issued letters to some of the parties u/s 133(6) (of Income Tax Act, 1961), however some of these letters 'returned unserved'.
5. AO made the addition on account of un-proved/inflated purchases for Rs. 35,99,465.
6. AO also made separate addition on account of cessation of liability u/s 41(1) (of Income Tax Act, 1961) in the case of one party for Rs. 1,46,548.
7. CIT(A) confirmed the additions.
On appeal, the ITAT held as under:
8. If the books of account are found reliable then no addition should be made.
9. Regarding addition u/s 41(1) (of Income Tax Act, 1961), the assessee had filed additional evidences before us which we take into account and admit the same and remand the matter to the file of the AO who will scrutinize and examine the contention of the assessee that the income has been offered in the subsequent year.
10. Accordingly, on both the scores the matter is restored to the file of the AO.
Case Reference - Chandrakant Manilal Thakkar Vs ITO.
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "C", MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
AND SHRI AMIT SHUKLA, JUDICIAL MEMBER
ITA No. : 600/Mum/2011
(Assessment year :2007-08)
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