Uplaksh Metal Industries vs Commissioner of Income Tax

Adarsh Kumar Goel, J.—The assessee has preferred this appeal u/s 260A of the Income Tax Act, 1961 (hereinafter referred to as ''the Act'') against the order dated 1-5-2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench in ITA No. 1356/CHD/1993 for the assessment year 1990-91.

A number of substantial questions of law have been proposed in para 18 of the appeal which are said to have arisen out of finding of the Tribunal recorded in para 9 of the impugned order.

The assessee claimed trade credit in respect of his liability to make payment to the trade creditors who are not identified. The Tribunal reversed the finding of the CIT(A) and held as under:

However, in our opinion the observation of the Assessing Officer that the assessee was prima facie required to prove the genuineness of the transaction and identity of the creditors is not misplaced because there is no distinction laid between the trade creditor and the non-trade creditor and we are further of the opinion that in case the assessee claims liability of payment to the trade creditors shown in the balance-sheet, the assessee is definitely required to prima facieprove the identity of the trade creditors as well as the genuineness of the transaction. In this case, admittedly the assessee has neither been able to disclose the complete addresses of the trade creditors nor is able to give the complete addresses of the consignors nor the name has been mentioned on the challan forms, so the verification of the same by the Assessing Officer became totally impracticable on account of lack of this complete information supplied by the assessee. It means that the assessee failed in establishing the genuineness of the so called trade creditors appearing in its books of account. We are further of the opinion that since in the instant case of the assessee, the point under consideration before us is regarding the genuineness of the liability amounting to Rs. 1,75,26,586 shown by the assessee in its balance-sheet as trade creditors, so it was not relevant for us to consider as to whether the purchases made by the assessee were genuine or not or to whether the assessee has inflated those purchases or not. It is also not material to consider whether the GRs from sale-tax department were verified or not, so, the CIT(A) on considering these points was not justified in deleting the impugned addition without discussing as to whether the liability of trade creditors shown by the assessee in the absence of furnishing complete addresses of trade creditors/consignors and the payment vouchers was genuine or not.

Learned Counsel for the assessee submits that genuineness of the transaction could not be doubted from the fact that the assessee was not able to give the addresses of the trade creditors who are large in number and it was not possible to get their details.

The Tribunal did not find merit in this contention and held that the assessee was not entitled to deduction on that account.

It is also submitted that the impugned entry in the account books of the assessee as trade liability could not be treated as income without any basis. Once entry of liability was not accepted, treating the amount as income of the assessee was consequential.

In our view, the issue raised is in the realm of appreciation of evidence. 8. We are unable to hold that any substantial question of law arises in the appeal.

Dismissed.