TMI Blog2023 (1) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... that as cessation of liability u/s.41(1) of the Act as well as unexplained credit u/s.68 . CIT(A) moved a further step and treated this amount as profit chargeable to tax u/s.28(iv) of the Act as profits and gains of business or profession in view of decision of T.V.Sundaram Iyengar Sons Ltd [ 1996 (9) TMI 1 - SUPREME COURT] . Admittedly, this is a simple transaction of loan received by assessee s wife in the books and therefrom she has advanced this amount and assessee is able to prove the sources by filing confirmation from the third party and assessee s wife, although Trimex Resources Pvt. Ltd., does not file return of income for these years i.e. assessment year 2014-15 to 2016-17. But the AO has not taken any step to verify from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The learned Commissioner of Income Tax (Appeals) 2 erred in not understanding the nature of transaction undertaken with the alleged party. 4. The learned Commissioner of Income Tax (Appeals) 2 erred in not appreciating the confirmation and return of income submitted by Mrs. Kavitha for the relevant assessment year. 3. Brief facts are that the assessee is engaged in the business of money lending. The assessee filed his return of income for the relevant assessment year 2015-16 on 29.08.2015 and accordingly, assessee s case was selected for scrutiny assessment under CASS under the limited scrutiny category i.e., for purchase of property. The number of facts discussed by the AO in his order at para 8 9 are that the AO while goi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not existing in the address given in the return of income, I have no other way except to conclude that the amount of Rs.1,06,40,000/- received during the assessment year, and the same is treated as unexplained income of the assessee u/s 68 of the Act. 10. As already discussed in the foregoing paras, the amount due to M/s.Trimex could also be treated as no longer repayable as the company is non-existent, coupled with no confirmation letter received from the said company, the amount to be repayable could also be treated as cessation of liability and accordingly also disallowable u/s 41(1) of the Act. Aggrieved assessee preferred appeal before CIT(A). 4. The CIT(A) also confirmed the action of AO first of all for the reason that T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.96.40 lakhs which pertains to earlier year. During the year the assessee received a sum of Rs.1,06,40,000/- as confirmation filed by assessee and this entry has routed through banking transactions and none of the authorities below i.e., CIT(A) or AO could not understand the nature of transaction and treated that as cessation of liability u/s.41(1) of the Act as well as unexplained credit u/s.68 of the Act. The CIT(A) moved a further step and treated this amount as profit chargeable to tax u/s.28(iv) of the Act as profits and gains of business or profession in view of decision of Hon ble Supreme Court in the case of T.V.Sundaram Iyengar Sons Ltd., supra. Admittedly, this is a simple transaction of loan received by assessee s wife Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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