Non Confirmation from Debtors/creditors

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Aajay (Querist)
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14 December 2010 Dear all,

One of my clent is unable to provide confirmations from all debtors and creditors.AO wishes to add difference amount in the income. He is asking why difference in confirmations of parties and amount of parties (creditors)from whom no confirmation has been filed should not be added in the income of assess.
What should be the best reply for his question.?
Is there any case law stating that no addition shall be made on the basis of difference in confirmations from parties.

thanks

Aajay

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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15 December 2010 Balance confirmation from all the parties is not required, AO cannot force for confirmation. If you are submitting audited books that is enough. You jsut produce your compnay policy in this regard, that we take the confirmation above the limit and as per this you have issued the letter to all of them.