TaxTMI 
TaxTMI 
2019 (3) TMI 465
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....sundry creditor'. The matter has been dealt by the ld. A.O as under: There had been claim of Sundry Creditors for the sum of Rs. 1,10,17,324/- and Expenses payable (Audit fees, Telephone Expenses & Mobile Expenses) of Rs. 9,350/- in the Balance Sheet of the assessee for the A.Y 2012-13. Accordingly, such Sundry Creditors of Rs. 11,10,17,324/- were credits In the accounts of the assessee during the F.yr. 2011-12 relevant to the A. Y 2012- 13. The assessee did not explain the above credits in his accounts by furnishing accounts, confirmation of such balances from the respective parties and bills and vouchers in support of such claim of Sundry Creditors Balances. Accordingly, the assessee was directed to show cause as to why the above credits In his accounts should not be treated as unexplained credit in his account during the financial year 2011-12 and the same should not be added to his total income for the A. Y 2012-13 The assessee did not offer any explanation against the above show cause and also did not furnish any documentary evidence in support of his claim. Accordingly, the sum of Rs. 1,10,17,324/- is treated as unexpl....
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.... During the course of the assessment, the Ld AO noticed that there had been claim of Sundry Creditors for the sum of Rs. 1,10,17,324/- and Expenses payable (Audit fees, Telephone Expenses & Mobile Expenses) of Rs. 9,350/- In the Balance Sheet of the assessee for the A.Y 2012-13. Accordingly, the Ld.AO reckoned that such Sundry Creditors of Rs. 1,10,17,324/- were credits in the accounts of the assessee during the F.Y. 2011-12, relevant to the A.Y 2012-13. According to the ld AO, the assessee- Individual did not explain the above credits in his accounts by furnishing accounts, confirmation of such balances from the respective parties and bills and vouchers in support of such claim of Sundry Creditors Balances. Therefore, as recorded by the Ld AO, the assessee was directed to show cause as to why the above credits in his accounts should not be treated as unexplained credit in his account during the Financial Year 2011-12 and the same should not be added to his total income for the A.Y 2012-13. The Ld AO has recorded further, that the assessee- individual did not offer any explanation against the above show cause and also did not furnish any documentary evidence in support of his claim....
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....ooks / Balance Sheet. This was after the Ld.AO has noticed that the figure of Rs. 73,86,727/- was appearing as Sundry Creditors and the figure of Rs. 36,30,597/- was appearing under the head of Advance Credit in the liabilities, as per the Balance Sheet ended 31.03.2012. Though the specific requisition had been made by the Ld. AO by the order sheet noting of 26.03.2015 available on record, calling for the account confirmation of all the Sundry Creditors, details of whether liabilities were discharge with documentary evidence, bank and party details of the creditors, etc, there was no compliance by the assessee, as has also been noted by the Ld.AO. Though the names of the parties had been enclosed with the balance sheet of M/s Champion Sales and Services, the proprietary concern of the assessee, the specific confirmations as requisitioned by the Ld. were not offered by the appellant-assessee. During appeal also, the appellant has made no effort to obtain and furnish the proof from the Sundry creditors by way of confirmation of accounts, or even payments over the succeeding years. The appellant has only depended upon the lack of any enquiry by the Ld AO. However, in my considered opi....
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....bai, the Hon'ble ITAT, Bench A by their order dated 20.02.2015, reported in [2015] 59 taxmann.com 430 (Mumbai - Trlb.) have held as under: IT : Where assessee could not provide addresses, confirmation, etc., from two creditors and It was found that in last so many years those parties had never been seen by anybody and they had also not made any demand from assessee for last more than 10 years, liability In respect of said creditors was considered as having been ceased under section 41(1) Section 41(1) of the Income-tax Act, 1961 - Remission or cessation of trading liability (Cessation of liability) - Assessment year 2007-08 - During assessment proceedings, Assessing Officer asked assessee to furnish details and confirmation of all sundry creditors shown In balance sheet - Assessee could not submit confirmation of two creditors - It was found that in last so many years those parties has never been seen by anybody, nor any known address of them was available; that there was never any demand for payment by any of said parties from assessee for last more than 10 years; and that no Income-tax returns had been filed by them - Whether liability of assessee had ceased to exist....