Shanti Prime Publication Pvt. Ltd.
Sec. 68 of Income Tax Act, 1961 - Cash Credit – During the course of scrutiny assessment proceedings, the AO asked the assessee to explain the sundry creditors of Rs. 48,80,73,557/- appearing in the balance sheet as on 31.03.2004. The AO observed that the Assessee has merely submitted the names of the parties alongwith the addresses. Notices u/s. 133(6) of the I.T. Act, 1961 were issued, but many of the parties on the basis of the addresses given, out of which many were not complied with. The AO accordingly made the addition of Rs. 146925493/-. ITAT allowing the appeal of the assessee held that ”It is an undisputed fact that the AO has simply added the balance as on 31.3.2004 without realizing that the entire credit balance were the outcome of the purchases made during the year. It is also undisputed that in the immediately succeeding years the outstanding have been paid by the assesee. Once the purchases have been accepted as genuine and no adverse inference has been drawn, In our considered opinion the lower authorities were not at all justified in making the addition of the balance outstanding as on 31.3.2004“. Hence, the entire addition made by the AO was directed to be deleted. - IKEA TRADING (INDIA) PRIVATE LIMITED. V/s DEPUTY CIT -  83 ITR (Trib) 415 (ITAT-DELHI)