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2018 (7) TMI 2066 - AT - Income TaxAddition u/s 68 - unexplained cash credits - AO had added assessee’s customer’s advances by terming the same to be both non genuine as well as suppressed revenue receipts cessation of liability u/s 41(1) - HELD THAT:- There is no dispute that the assessing authority had nowhere invoked section 68 so far as the impugned customer’s advance are concerned in particular. He had made this addition by holding that corresponding liability towards the customers had ceased to exist in the impugned assessment year. It is therefore clear that the CIT(A) has applied section 68 of the Act qua the remaining advances which could not be explained in the remand proceedings. The assessee has nowhere been put to notice before invoking section 68 during course of lower appellate proceedings. There is no further issue that section 41(1) applies in the case of outstanding advances carried forward from the preceding assessment years which are either remitted as a case of cessation of liability in the impugned assessment year. We therefore find no merit in the impugned addition converted from cessation of liability to unexplained cash credits for this assessment year. The same stands deleted accordingly. There is no dispute that the assessing authority had nowhere invoked section 68 so far as the impugned customer’s advance are concerned in particular. He had made this addition by holding that corresponding liability towards the customers had ceased to exist in the impugned assessment year. It is therefore clear that the CIT(A) has applied section 68 qua the remaining advances which could not be explained in the remand proceedings. The assessee has nowhere been put to notice before invoking section 68 during course of lower appellate proceedings. There is no further issue that section 41(1) of the Act applies in the case of outstanding advances carried forward from the preceding assessment years which are either remitted as a case of cessation of liability in the impugned assessment year. We therefore find no merit in the impugned addition of ₹ 9,77,500/- converted from cessation of liability to unexplained cash credits for this assessment year. The same stands deleted accordingly. Section 40 (a)(ia) disallowance - Assessee's only argument before us is that section 40(a)(ia) as amended by Finance Act 2014 w.e.f. 01.04.2015 prescribing such disallowance to be restricted to 30% only than the entire amount of ₹ 1,79,800/-; applies with retrospective effect - HELD THAT:- We find no force in Revenue’s instant arguments as a coordinate bench of this tribunal in Shri Rajendra Yadav [2016 (3) TMI 358 - ITAT JAIPUR] already concludes the above amendment w.e.f. 01.04.2015 to be retrospective effect being curative in nature. We therefore direct the Assessing Officer to restrict the impugned disallowance to 30% only to be followed by necessary computation as per law. This latter substantive ground is treated as partly accepted in above terms.
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