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2015 (9) TMI 598 - AT - Income TaxAddition under section 68 - amount payable by the assessee to farmers towards purchase of sunflower seeds as unexplained cash credits - Held that:- As rightly submitted by the Ld. Counsel for the assessee, the impugned credits being trade credits of the assessee on account of purchase of sunflower seeds are not in the nature of cash credits as envisaged under section 68 and the same therefore cannot be added to the income of the assessee by invoking the said provision. Moreover, as pointed by him from the trading account of the assessee for the year under consideration the corresponding seeds purchased from the seven farmers for ₹ 54,49,961 were sold in the year under consideration itself for ₹ 58,89,195 and the said sale was duly credited to the trading account of the assessee. As rightly contended by the Ld. Counsel for the assessee, such sale not being possible without any corresponding purchases, the purchases so made could not otherwise be treated as bogus, despite the failure of the assessee to establish the identity of the concerned creditors/suppliers. It is also observed that the resultant profit arising from the relevant transactions of purchase and sale of sunflower seed was duly disclosed by the assessee in the trading account. Thus addition u/s 68 deleted - Decided in favour of assessee. Unexplained expenditure under section 69C - whether the amounts in question representing liabilities which had ceased to exist could be added to the total income of the assessee alternatively under section 41(1) as contended by the learned D.R? - Held that:- The two amounts in question have not been paid by the assessee till date nor any party has demanded the said amounts appearing in the books of account of the assessee as liabilities. Since the said amounts represented liabilities of the assessee on account of purchases which had been claimed as expenditure in the earlier years, we are of the view that the provisions of section 41(1) are clearly applicable when it is established that the said liabilities as shown by the assessee actually ceased to exist in the year under consideration itself. We, therefore, confirm the addition made on this issue by invoking the provisions of section 41(1) - Decided against assessee. Validity of the assessment - Held that:- The present case however is not such a case where notice under section 148 is issued to give effect to any finding or direction contained in the appellate order of the Tribunal but it is a case of regular assessment made by the A.O. under section 143(3) afresh as per the direction of the Tribunal given in order passed under section 254. The provisions of section 150(1) thus are not applicable in the case of the assessee where the assessment is made by the A.O. under section 143(3) read with section 254 and the issue raised by the assessee in ground No.6 relying on the said provisions is devoid of any merit - Decided against assessee.
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