Dalip Kumar Yadav, Haryana vs Ito Ward-1(4), Gurgaon on 24 August, 2023
" Unexplained Sundry Creditors
A. In this regard, it is seen from the documents filed by the
appellant that there is no satisfactory explanation or evidence
with regard to the genuineness of the transactions. The
appellant has filed merely the confirmation from the various
creditors. Perusal of the confirmation reveals that the same do
not carry any details with regard to the day to day
transactions between the appellant and creditors. The
appellant also did not furnish these details in-spite of being
specifically asked by me to file the same. It is also seen that no
payments has been made by the appellant to any of the
creditors except one during the year under consideration. It is
highly improbable that a small town trader could survive after
allowing credit for almost 2-3 years without asking for
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ITA No.3428/Del/2019
Dalip Kumar Yadav vs. ITO
payment. On Further enquiry it was noted that all the
payments were claimed to have been made in cash over the
years. Copies of the year wise accounts of the creditors
showing payments made by the appellant are enclosed as
Annexure-I to this order. It is seen that the repayments are
either in cash or through transfer of plant & machinery. Cash
payments are shown in amounts of less than Rs. 20,000/- per
day in a number of installments. In these circumstances,
notwithstanding the fact that some of the creditors had
furnished confirmations, it is evident that the creditors were not
genuine and the credit balances were created with an intention
of inflating the expenses. All these facts show that the
appellant has not been able to establish the genuineness of
these credit entries. It is a settled law that the onus to prove
the genuineness of the credit entries lies on the appellant. The
appellant failed to discharge the onus. The addition made on
this account is also confirmed. The appellant has submitted
that the opening balances of Sundry Creditors was Rs.
25,95,197/- and further purchases were made from these
parties aggregating to Rs 26,13,060/- during the year under
consideration. The AO is directed to verify this facts from
record. The addition is restricted to the credit balance added
during the year under consideration."