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2016 (10) TMI 243 - AT - Income TaxUnsecured cash credit - Held that:- A bare reading of section 68 would show that there has to be credit of amounts in the books maintained by the assessee during the previous year and the assessee either offers no explanation or the explanation offered by the assessee about the nature and source of such credit, in the opinion of Assessing Officer, is not satisfactory. It is only in such circumstances the sum so credited may be charged to Income Tax as the income of assessee. In other words, for making addition u/s. 68 of the Act, the assessee should have received cash. In the present case the stand of the assessee is that Shri S.S. Dhage and Shri B.M. Gaikwad are shown as creditors as they had rendered services and the assessee was to make payment to the aforesaid persons for the services rendered. A perusal of the assessment order shows that the Assessing Officer has made addition without quoting any section in the assessment order. In first appeal the Commissioner of Income Tax (Appeals) clarified that the addition has been made u/s. 68 of the Act. The addition made in respect of outstanding expenses payable to Shri S.S. Dhage and Shri B.M. Gaikwad cannot be made u/s. 68 of the Act. The provisions of section 68 are not attracted where services are received by the assessee and an entry is made in the books crediting liability in account of person from whom services are received. In view of the facts of the case and the provisions of section 68 of the Act, the additions confirmed by the Commissioner of Income Tax (Appeals) u/s. 68 of the Act are not sustainable. Accordingly, the findings of Commissioner of Income Tax (Appeals) on this issue are set aside - Decided in favour of assessee.
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