Income Tax Officer, Ward-1(1), Ghaziabad. Vs. Smt. W/o Shri Pramod Gupta, A-81, Chander Nagar, Ghaziabad.
August, 30th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
`A' : NEW DELHI
DELHI BENCH `A
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
VARKEY, JUDICIAL MEMBER
SHRI ABY T. VARKEY,
Assessment Year : 2008-
Income Tax Officer, Vs. Smt. Anita Gupta,
Ward-1(1), W/o Shri Pramod Gupta,
Ghaziabad. A-81, Chander Nagar,
PAN : AFVPG8914K.
Appellant by : Ms. Y. Kakkar, Sr.DR.
Respondent by : None.
PER G.D. AGRAWAL, VP :
This appeal by the Revenue is directed against the order of
learned CIT(A), Ghaziabad dated 7th November, 2012 for the AY 2008-
2. Ground No.1 of the Revenue's appeal reads as under:-
"The ld.CIT(A) has erred in law & on facts by deleting the
addition of Rs.12,31,850/- without appreciating the fact
that assessee has failed to discharge its onus to prove the
identity, creditworthiness and genuineness of the
3. Ground No.2 is only arguments in support of above ground of
4. At the time of hearing before us, none appeared on behalf of the
assessee despite the service of notice by registered post. Therefore,
we proceed to decide the appeal ex-parte qua the assessee.
5. We have heard the arguments of learned DR and perused
relevant material placed before us. The Assessing Officer disallowed
20% of the creditors with the following finding in the assessment
As per return of income you have shown nett. Income
at Rs.227140/- against turnover Rs.2,13,96,205/- resultant
N.P. is almost @ 1.06% which is very low for an export
business concern and Commission income at Rs.28,945,
interest income at Rs.21,917/- and other income at
Rs.19,13,425/-. You have shown creditors for
Rs.56,90,895/- and loans for Rs.4,68,375/- (=61,59,270/-).
Business cannot be run without any credit. Creditors are
an inevitable part of business. You have failed to
discharge your onus of proving the creditors/loans. In
absence of any details it is not possible to ascertain the
identity, creditworthiness of the creditors/loans and
genuineness of the transaction. To be prudent it would be
fair if only 20% of the creditors/loans i.e. Rs.12,31,850/- are
considered as not verifiable and added to your income.
(Proposed addition Rs.12,31,850/-)."
6. Learned CIT(A) deleted the addition. The Revenue, aggrieved
with the order of learned CIT(A), is in appeal before us.
7. After considering the arguments of learned DR and the facts of
the case, we do not find any justification to interfere with the order of
learned CIT(A). The Assessing Officer himself has recorded that the
turnover of the assessee is more than `2 crores and in the business,
creditors are an inevitable part. However, despite observing this, he
proceeded to add 20% of the creditors/loan as unverifiable. We are
unable to accept any justification for the presumption that 20% of the
creditors are not verifiable. The addition for unexplained cash credit, if
any, can be made for a specific creditor and there cannot be a lump
sum or adhoc addition of certain percentage of the creditors.
Moreover, on page 19 paragraph 5.3, the CIT(A) has recorded the
"During appeal, the appellant has contended that all the
un-secured loans are old loans and the same is apparent
from balance sheet and its ledger accounts. Thus, I agree
that appellant's contention that no addition can be made in
respect of un-secured loans which are only brought forward
balances from earlier years."
8. From the above, it is evident that all the unsecured loans are old
loans and, therefore, no addition can be made in this year in respect of
brought forward balance of those years. In view of the above, we
uphold the order of learned CIT(A) and dismiss the appeal filed by the
9. In the result, the appeal of the Revenue is dismissed.
Decision pronounced in the open Court on 29th August, 2014.
(ABY T. VARKEY) AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 29.08.2014
Copy forwarded to: -
1. Appellant Officer,
: Income Tax Officer,
2. Respondent : Smt. Anita Gupta,
W/o Shri Pramod Gupta,
A-81, Chander Nagar, Ghaziabad.
5. DR, ITAT