2012 (8) TMI 674

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.... made out of interest claim Rs. 3,75,330/- (iv) Disallowance made out of Cooly and Delivery charges claimed Rs. 52,198/- 2. Short facts apropos are that assessee, a wholesale grain dealer, had filed its return of income declaring a total income of Rs. 1,18,978/- for the impugned assessment year. Assessing Officer noted from the records produced by the assessee that it had made purchases to the tune of Rs. 28,27,500/- from the following parties:- (1) Kumaresan, Chengalpattu Rs. 1,65,000 (2) Gopi, Arumbakkam Rs. 1,50,000 (3) Selvan, Thiruvallur Rs. 1,65,000 (4) G. Uma Shankar, Arumbakkam Rs. 17,12,500 (5) Kannan, Ponneri Rs. 1,60,000 (6) Munusamy Naidu, Chengalpattu Rs. 1,70....

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....o him, assessee could not discharge burden of proof resting on it, for proving the trade creditors appearing in its books, which called for application of Section 68 of the Act. Payments for purchases were all effected in cash and such purchases were supported only by self-made vouchers. Insofar as disallowance under Section 40A(3) was concerned, CIT(Appeals) was of the opinion that assessee could not establish that the recipient was an agriculturist. He also confirmed disallowance of Rs. 2,54,791/- made on interest for not proving the genuineness and creditworthiness of concerned creditors. Insofar as disallowance of Cooly and Delivery charges was concerned, CIT(Appeals) was of the opinion that the A.O. was liberal in restricting the disal....

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....ly mentioned that assessee was a wholesale grain merchant. So, the preponderance of probability is that the purchases made by the assessee were from agriculturists. It would not generally be possible to obtain bills from agriculturists and therefore, the best that could be done in such circumstances was to have self-made vouchers. This the assessee had done. No defect in such self-vouchers has been pointed out. There is no finding by the A.O. that the said amounts were appearing as payable to the said parties at the end of the previous year. The disallowances were made disbelieving the purchases and not because any trade credit balance stood unproved. Application of Section 68 is called for only where any credit balance stands unproved. ....