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2017 (5) TMI 1115 - HC - Income TaxAddition u/s 68 - cheques received by assessee admittedly were not presented for collection in Bank - Held that:- In the case at hand, there is no dispute that the assessee had received cheques for a sum of ₹ 15,00,000/- and entries in this regard were made in his books of accounts having received the said amount by way of unsecured loans from various persons. The assessee has also offered an explanation regarding the above entries but the explanation was not found to be satisfactory by the Assessing Officer and it was held that the aforesaid entries were in the nature of accommodation entries so as to raise bogus liabilities. The submission is that the entry of credit in the books of accounts may be relevant only when there is a cash transaction and not where the payment is through the cheques unless the cheques are cleared and encashed. Section 68 of the Act is clear enough as it uses the term "sum is found credited in the books of accounts of the assessee". It does not make any distinction between any cash or cheque transaction. The sum found credited in the books of accounts of the assessee includes within its fold, the entry either by way of cash or by cheque irrespective of the encashment of the cheques. Thus both the essential conditions for applicability of Section 68 of the Act stands fulfilled. Despite non-encashment of the cheques by the assessee, the entries of credit appearing in his books of accounts for which no plausible explanation to the satisfaction of the Assessing Officer was furnished would attract Section 68 of the Act and the sum so credited by the entries would be deemed to be income of the assessee chargeable to tax. - Decided against assessee.
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