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2016 (9) TMI 1044 - AT - Income TaxUnexplained cash credit - addition u/s 68 - Held that:- . The assessee was found to have made purchases on credit during the relevant previous year (f.y. 2005-06), which were unpaid by the year-end. Significant proportion of the same remaining unpaid even by 31.3.2008, i.e., two years hence, seriously impaired the genuineness of the credit/s. Neither the material adduced in support, nor the enquiries conducted or the incidents found, which are neither denied nor rebutted, further confirm and validate the inference of the same being bogus or mere accommodation entries. The law does not draw any distinction between one credit and another – on which basis principally relief stood allowed by the first appellate authority, so that any credit which is not satisfactorily explained could be deemed as income u/s. 68, which is essentially a rule of evidence, the basis of which is that an amount could be subject to tax on the ground that the assessee is a beneficiary of the said sum, so that it is for it to explain its’ nature and source. The question is of real versus apparent, which in view of sec. 68 casts the burden of proof on the assessee to prove that the apparent is real In the instant case, there is nothing to show the conduct of business by the ‘trade creditors’, with even their addresses remaining elusive, so that their being considered as regular traders, much less being in a position to extend credit, remains completely unproved. The credit was for an indefinite period, extraordinary by any count, well beyond the capacity of even a regular trader. The capacity as well as the genuineness aspect is completely unproved in the present case. The identity, which thus becomes of little consequence, could though be said to be satisfactorily explained in-as-much as the repayment is through account payee cheque and the firms being registered under VAT. Surprisingly, however, it is not known who the proprietors/partners of these firms are. Even so, the subsequent payments by cheque, however, could not be dismissed lightly, as it is prima facie indicative of an existing liability. Whether the bank account in which the cheques are banked are the regular accounts of the parties, etc., duly disclosed and forming part of the regular accounts, etc. are aspect that would require to be looked into. An accommodation entry, on the other hand, would normally be accompanied by withdrawal of cash, which is then recycled by the name lender to the payer. The matter requires factual determination, and for which the same is therefore, without any fetters, restored back to the file of the assessing authority. We decide accordingly. - Decided in favour of revenue for statistical purposes.
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