Assessee Smt. Purnima Sunil Agrawal,, Valsad The Income Tax Officer,Vapi Ward-2, Vapi

This Income Tax Appellate Tribunal case involves an assessee engaged in scrap trading, Smt. Purnima Sunil Agrawala. The appeal challenges the Income Tax Officer's decision to treat the entire amount of sundry creditors, totalling Rs. 56,68,960, as a cash credit under Section 68 of the Income Tax Act. The assessee also disputes the estimation of 2% of turnover as taxable income, arguing it should be 1.07% as declared.

IN THE INCOME TAX APPELLATE TRIBUNAL
SURAT BENCH, SURAT
BEFORE SHRI PAWAN SINGH, Hon'ble JUDICIAL MEMBER
AND SHRI ARJUN LAL SAINI, Hon'ble ACCOUNTANT MEMBER
(Virtual Court-Virtual Hearing)

I.T.A No.3224/AHD/2015
Assessment Year: 2011-12

Smt. Purnima Sunil Agrawala,
902, Orchid Tower,
Chharwada Road, Vapi Dist.
Valsad-396195.
[PAN: AAVPA 0055 E]
Appellant

Vs. 

The Income Tax Officer,
Vapi Ward-2, Vapi.
Respondent

Assessee by Shri A.Gopalakrishnan – AR
Revenue by Ms. Anupama Singla – Sr.DR
Date of hearing: 30.09.2020
Pronouncement on: 22.10.2020

O R D E R

PER DR. ARJUN LAL SAINI, AM:

The captioned appeal filed by the assessee pertaining to assessment year 2011-12, is directed against the order passed by the ld. Commissioner of Income Tax(Appeals), Valsad in appeal no. CIT(A)/VLS/59/14-15 dated 18.08.2015, which in turn arises out of an assessment order passed by the ld. Assessing Officer(AO) under section143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.03.2014.

1. Ground of appeal raised by the assessee are as follows:

“1. On appreciation of the facts and circumstances of the case and law the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned Assessing Officer in treating the entire amount of sundry creditors to the tune of Rs.56,68,960/- as cash credit Under section 68 of the Act. The action of the Learned Commissioner of Income Tax (Appeals) is based on presumptions only, contrary to the facts of the case and deserves to be deleted.

2. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) has erred in estimating 2% of the turnover as taxable income in the case of the appellant as against 1.07% as disclosed by the appellant in his return of income for the year under consideration.

3. The appellant craves leave to add, amend, modify or alter the above grounds of appeal at any stage of appellate proceedings.”

2. The brief facts qua the issue are that assessee before us is an individual and engaged in the business of scrap trading. The assessee has filed her Return of Income for assessment year 2011-12 on 26.09.2011 declaring total income at Rs.4,20,170/-. The Return of Income of the assessee was processed by the Department under section 143(1) of the Income Tax Act, 1961. Later on, the assessee’s case was selected for scrutiny under section 143(3) of the Act. During the assessment proceedings, the assessee has appeared from time to time before the Assessing Officer and submitted details and documents such as Auditors Report in form no.3CB, form no.3CD, Balance Sheet, Profit and Loss Account etc. On verification of Balance Sheet of the assessee, it was noticed by the Assessing Officer that assessee has shown sundry creditors to the tune of Rs.52,68,960/-. In order to verify the genuineness of the sundry creditors, the assessee was asked to furnish complete names and addresses of the sundry creditors and therefore, letters under section 133(6) of the Act, were issued to ten creditors on the addresses provided by the assessee on random basis. However, all the ten notices were returned unserved. Further the assessee was also asked during the assessment proceedings to produce the books of accounts including sale bills, purchase bills vouchers etc., for verification. However, the assessee failed to produce the same. Therefore, Assessing Officer issued a show cause notice to the assessee on 07.03.2014 asking the assessee to furnish the details about sundry creditors shown by him in the Balance Sheet.

To know more in details find the attachment file