2015 (10) TMI 1492

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....e inter-connected, we decide the issues raised by both sides simultaneously. In fact an addition of Rs. 16,90,811 was made by the Assessing Officer in respect of deposits in savings bank account of the assessee and against this addition, the Commissioner of Income-tax (Appeals) confirmed addition of Rs. 10 lakhs and allowed relief of the balance amount of Rs. 6,90,811. The Assessing Officer has also made an addition of Rs. 21,60,421 in respect of sundry creditors from three parties. When the assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals), he deleted an addition of Rs. 7,52,415 pertaining to M/s. Raj Kumar and Co. but confirmed two additions of Rs. 8,22,415 and Rs. 5,85,571 pertaining to M/s. Fashion Tr....

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....arding the addition made by the Assessing Officer in respect of creditors and partly confirmed by the Commissioner of Income-tax (Appeals), he drew our attention to para 7 of the assessment order whereas it is noted by the Assessing Officer that the creditors were having opening balance and there is no purchase during the present year. He submitted that under these facts, no addition can be made in the present year. 4. As against this, the learned Departmental representative for the Revenue supported the orders of the Assessing Officer. 5. We have considered the rival submissions. Regarding the first addition made by the Assessing Officer of Rs. 16,90,811 against which addition was upheld to the extent of Rs. 10 lakhs, we find that the As....

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....1 should be confirmed. We order accordingly. 5.2. Regarding the addition on account of initial capital for doing this business outside the books, we find force in the submissions of the learned authorised representative for the assessee that the assessee was having opening balance of Rs. 3,18,872 in this bank account and in our considered opinion, for doing an annual turnover of Rs. 16.90 lakhs for which the addition has been made by the Assessing Officer, this much fund is sufficient as initial capital. Hence, in our considered opinion, in the facts of the present case, no addition is called for on account of initial capital for doing this business outside the books. We confirm the addition to the extent of Rs. 1,82,945 being 10.82% of Rs....