2011 (5) TMI 821

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....s of account of the assessee after holding that the transaction shown in the names of the sundry creditors were not genuine yet the Assessing Officer instead of proceeding to determine the assessment under section 144 proceeded to add the sundry creditors amount in the income of the assessee under section 68 of the Income-tax Act ?"   Learned counsel for the appellant vehemently submitted that the appellant-assessee discharged all its obligations to justify the entries made in the books of account showing the credit balance as sundry creditors amounts of 12 persons by disclosing the identity of those persons who supplied the materials to the appellant and admittedly the appellant is the contractor engaged in the construction activit....

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.... could have been taxed under section 68A.   Learned counsel for the appellant in support of his contention relied upon the two judgments of the Division Bench. The first judgment is dated January 28, 2009, passed by the Division Bench of the Rajasthan High Court in the case of CIT v. G. K. Contractor and another judgment is passed by the Division Bench of the Allahabad High Court in the case of CIT v. Pancham Dass Jain reported in [2006] 156 Taxman 507 (All).   Learned counsel for the Revenue submitted that from the evidence of the persons whose identities have been disclosed by the assessee himself it is fully proved that the transaction recorded in the books of account of the assessee was not genuine transaction and for th....

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....ficer as well as by the Income-tax Appellate Tribunal that none of the alleged suppliers of the materials was maintaining the books of account, none of them have filed any return of income, none of them have any evidence regarding purchase of goods supplied by them, none of them have any evidence regarding transport of goods supplied by them and even though a number of them had claimed to have bank accounts, none of the payments was ever received by those persons for the goods from the assessee's bank account and even though the transaction of each of the sundry creditors run into several lakhs not even a single rupee out of the cash (bearer cheque) received was deposited into their bank accounts.   We have mentioned these reasons o....