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2016 (4) TMI 1347 - AT - Income TaxAddition u/s 68 - assessee failure to fulfill requisite condition of identity of creditor and genuineness of the transaction, despite the opportunities given by the AO - HELD THAT:- We find that the amount in question is a brought forward balance as shown in the account of the two parties viz., M/s.Beijia Industrial Co. Ltd., and M/s.S.I.International Co., who are stated to be suppliers of the assessee. CIT(A) has recorded the fact that the assessee has claimed this amount being a brought forward balance in the ledger accounts of the creditors - AO made the addition on the ground that the assessee failed to produce the confirmation of the creditor - this amount was shown as credit for the financial year 2005-06 and continued as carried forward till this year, then it would not be a case of credit entries in the books of account of the assessee during the year under consideration. Therefore, when no cash credit was entered into books of account during the year under consideration, then no addition u/s 68 can be made in respect of this amount of credit balance shown in the books of account. As regards the genuineness of the transaction is concerned, if the assessee failed to prove the existence of the liability in question then the addition can be made under the provisions of sec.41(1) or sec.28 of the Act and not u/s 68 - wet aside this issue to the record of the AO to re-examine the same in the light of the judgment of the Hon’ble Delhi High Court in the case of Usha Stud Agricultural Farm Ltd.(2008 (3) TMI 91 - DELHI HIGH COURT). The assessee is also directed to explain the status of the repayment of the liability. - Decided in favour of assessee for statistical purposes.
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