9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 1312 - AT - Income TaxUnexplained cash credit u/s. 68 - as per assessee the amount was received being advance on account of sale of potato seeds to the farmers and later adjusted the same with the sales within the same year and there is no carry forward credit. According to assessee these are merely a trade creditor - HELD THAT - We find that the plea of assessee is quite reasonable that this being trade advance by very nature of activity of the assessee and the same has been adjusted against the sales made to various parties and the area particularly farmer community. This being the nature these advances are surely trade advances and not cash credit as assumed by AO and upheld by CIT(A). In view of the above facts and circumstances we are of the view that trade advances cannot be treated as cash credit u/s. 68 and addition made and confirmed by lower authorities is deleted. - Decided in favour of assessee Addition being advance on account of amusement tax - addition under the sub head advance of amusement tax - HELD THAT - Assessee made no argument qua this addition and even otherwise the assessee before CIT(A) also did not argue on this. The assessee has disclosed this amount as loans and advance under the head loans with revenue authorities under the sub head advance of amusement tax . It is not clear from the records that whether this is paid or not. Once this is not paid it will not be claimed as deduction and the assessee is unable to prove that this is advance on account of amusement tax. As the assessee could not explain neither before lower authorities nor before us we confirm this addition. This ground of appeal of assessee is dismissed.
Issues:
1. Addition of unexplained cash credit under section 68 of the Income-tax Act. 2. Addition of advance on account of amusement tax. 3. Charging of interest under sections 234B and 234C of the Act. Issue 1: Addition of Unexplained Cash Credit under Section 68: The appeal pertained to the addition of Rs. 31,86,500 as unexplained cash credit under section 68 of the Income-tax Act. The CIT(A) confirmed the AO's action, stating that the burden was on the assessee to prove the credits shown in the books of account. The CIT(A) emphasized the need for the assessee to establish the identity, creditworthiness, and genuineness of the transactions. As the assessee failed to provide sufficient evidence, the entire amount was treated as unexplained cash credit. However, the Tribunal observed that the amount in question was received as advance on account of sale of potato seeds to farmers and was later adjusted against sales within the same year. The Tribunal noted that the advance was a trade advance and not cash credit, as claimed by the lower authorities. Considering the nature of the transactions and the evidence provided by the assessee, the Tribunal allowed the appeal, ruling that trade advances cannot be treated as cash credit under section 68 of the Act. Issue 2: Addition of Advance on Account of Amusement Tax: The second issue related to the addition of Rs. 4,084 as advance on account of amusement tax. The assessee did not contest this addition before the lower authorities or the Tribunal. The amount was disclosed as loans and advance under the head 'loans' with revenue authorities. However, the assessee failed to prove that this amount was indeed an advance on account of amusement tax. As the assessee could not provide any explanation, the Tribunal upheld the addition of Rs. 4,084. This ground of appeal was dismissed. Issue 3: Charging of Interest under Sections 234B and 234C: Regarding the charging of interest under sections 234B and 234C of the Act, the Tribunal noted that this issue was consequential in nature. Therefore, the AO was directed to recalculate the interest accordingly. The appeal of the assessee was allowed in part, with the Tribunal pronouncing the order on 06.02.2015. This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's findings and decisions on each issue.
|
