TaxTMI 
TaxTMI 
2026 (4) TMI 347
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....ing disposable plastic cups. It is a registered Small-Scale undertaking in Pondicherry. On 28.01.2003, it filed its 'return' declaring its income as Rs. Nil and also claimed a deduction of Rs. 9,10,600/- under Section 80-IA of the Income Tax Act, 1961 (in short "IT Act"). In the scrutiny proceedings, the Assessing Officer examined the entitlement of the assessee's claim and came to the conclusion that it satisfied all the conditions so as to claim deduction under Section 80-IA(4) of the IT Act. At the same time, the Assessing Officer noticed that in its balance sheet, the assessee had claimed an amount of Rs. 30,17,891.78 as sundry creditors. In support of this, the assessee failed to submit all necessary details of the creditors (ie.) thei....
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....ranting deduction under Section 80-IB of the Act to the extent of Rs. 11,86,758/- filed an appeal before the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in ITA 1042/Mds/2012. 7. The Tribunal, taking note of the fact that the source of sundry credits has not been proved by disclosing the identity, capacity and creditworthiness of the creditors. So, it held that the addition under Section 68 of the IT Act to the tune of Rs. 11,86,758/- was rightly ordered to be treated as assessee's business income. Against this order, the assessee has filed a miscellaneous petition seeking recall of the order on the ground that the judgments cited in favour of the assessee were not taken into consideration in proper perspective. The said Miscellane....
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....mon in the trade practice. However, during the course of assessment proceedings, the assessee failed to furnish details about the name and address of the sundry creditors and failed to give the confirmation letter from them indicating the date of loan and mode of payment. The list of names and amount of sundry creditors produced by the assessee without any confirmation letter and address of the creditors was not reliable document. Therefore, the Assessing Officer has doubted the genuineness of the cash credit claimed and added the amount of Rs. 16,42,093/- as unexplained credit under Section 68 of the IT Act. 10. On appeal, the Appellate Authority was able to find out the details of the sundry creditors to an extent of Rs. 4,55,355/- aft....
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....aken into consideration, therefore, the order of the Tribunal dated 29.01.2013 has to be recalled. 13. The above submissions were considered by the Tribunal and held that the judgments of the Jurisdictional High Court were also considered along with the judgments of the other High Courts and recorded that the assessee itself has not treated the impugned receipt to have been arising from the business in its books of account. So, the judgments relied by the assessee rendered in CIT vs. Abdul Rahman Industries reported in [293 ITR 475 (Mad)] has no application to the case in hand. 14. The short point involved in this case is, whether the source of sundry credits for which the assessee has sought deduction is properly explained. The answe....
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....ts nature and source. If the assessee fails to explain the nature and the source to the satisfaction of assessing authority, the same has to be charged to income tax of the income of the assesses. To claim deduction under Section 80-IA of the IT Act, the assessee ought to have first declared the sundry credit in question as its income derived from the industrial undertaking. 19. In this case, the assessee has not declared, the cash credit under any of the 5 heads of income. That apart, the source and identity of the creditors are also not placed before the assessing officer to his satisfaction. The appellant authority without any material evidence to satisfy the source and identity of the creditor, has accepted the explanation given by t....