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2018 (3) TMI 1519 - AT - Income TaxDisallowance u/s 40A(3) on account of purchases made in cash from M/s. Hanuman Traders - addition u/s 68 - Held that:- For considering the issue of peak credit, the authorities below have to laid-out the foundation that it was unaccounted money of the assessee having both debit and credit which assessee did not agree. It could not be taken into consideration for making such addition under section 68 in the hands of the assessee for making any alleged transaction with M/s. Hanuman Traders, which, according to the authorities below, did not exist and that no such entries appear in the books of account of the assessee. Some entries appeared in the books of account of the assessee regarding M/s. Hanuman Traders, according to the findings of the authorities below, such books of account of the assessee are not reliable. Therefore, the authorities below cannot rely upon the same entries in books of account for the purpose of making the addition of the nature of peak against the assessee. Thus, there is no justification for the authorities below to make addition of ₹ 6,92,25,000/- under section 40A(3) of the I.T. Act and addition under section 68 of the I.T. Act.
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