Nirja Khatuwala Vs ITO (ITAT Gauhati)

Last updated: 12 December 2020

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The Income Tax Appellate Tribunal (ITAT) Gauhati Bench heard an appeal by Nirja Khatuwala concerning an addition of Rs. 35,34,509 made under Section 68 of the Income Tax Act. The Assessing Officer made this addition after three sundry creditors failed to respond to notices issued under Section 133(6) of the Act. Despite the assessee being confronted, no satisfactory explanation was provided, leading the authorities to confirm the addition.

Court :
ITAT Guwahati

Brief :
This appeal is preferred by the assessee against the order of Ld. CIT(A)- Guwahati-1, Guwahati dated 12.11.2018 for A.Y. 2014-15.

Citation :
I.T.A. No. 41/Gau/2019

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH,
“VIRTUAL HEARING” AT KOLKATA

[Before Shri A. T. Varkey, JM]
I.T.A. No. 41/Gau/2019
Assessment Years: 2014-15

Nirja Khatuwala
(PAN:AFFPK 9172 D )
Appellant

Vs.

ITO, Ward-2, Nagaon
Respondent

Date of Hearing (Virtual) 04.11.2020
Date of Pronouncement 27.11.2020
For the Appellant Shri Akkal Dudhwewala, A.R
For the Respondent Shri Jayanta Khanra, D.R

ORDER

This appeal is preferred by the assessee against the order of Ld. CIT(A)-Guwahati-1, Guwahati dated 12.11.2018 for A.Y. 2014-15.

2. The sole issue is against the action of ld. CIT(A) confirming the addition ofRs. 35,34,509/- u/s 68 of the Income Tax Act, 1961 ( herein after, ‘the Act’). 3. Brief facts of the case as noted by the authorities below is that the assessee had filed return of income declaring total income of Rs. 8,64,800/-. The case was selectedfor scrutiny through CASS for limited scrutiny with the points of identification being large sundry creditors in comparison to low net profit. The Assessing Officer whileexamining the case of all the sundry creditors whose balance were outstanding as ofthe end of the previous year, found following three parties did not respond to hisSection 133(6) notice, therefore he drew adverse inference against the assessee against these three creditors.

According to the Assessing Officer, even though he confronted the assessee about non service/response of notice u/s 133(6) of the Act to these sundry creditors, no satisfactory replies were received from the assessee, therefore he made an addition of Rs. 35,34,509/-.

FAQ :

The main issue was the confirmation of an addition of Rs. 35,34,509 made by the Assessing Officer under Section 68 of the Income Tax Act, 1961.

The Assessing Officer made the addition because three sundry creditors, whose balances were outstanding at the end of the previous year, did not respond to notices issued under Section 133(6) of the Act.

The Assessing Officer drew an adverse inference against the assessee and made an addition of Rs. 35,34,509 to the income.

No, the assessee did not provide satisfactory replies when confronted by the Assessing Officer regarding the non-response of the sundry creditors to the notices.

The appeal was heard by the Income Tax Appellate Tribunal (ITAT), Gauhati Bench.

Attached File : 40_2833_1606906333_ita_no41_2019_nirja_khatuwala.pdf

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