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2019 (3) TMI 1543 - AT - Income TaxUnexplained cash credit u/s. 68 - credit represented liability to be paid on account of outstanding dues towards purchase of investments - transaction in question was between group companies i.e. the holding company and the subsidiary company i.e. the assessee company - HELD THAT:- There is no receipt of money rather there is a liability on the assessee company to pay outstanding purchase amount to M/s. APL. From the material on record that there was no cash involved in any stage of the transaction and that in the subsequent assessment year itself the transaction has been squared up by the assessee company by issue of debentures. AO erred in understanding the nuances of the Notes forming part of the audited accounts and proceeded on an altogether wrong footing holding that the outstanding sum reflected to be payable to M/s APL in relation to the investments purchased from was required to satisfy the rigors of Section 68 - the impugned addition made u/s 68 was wholly untenable on the given facts and in law. We however are of the view that the aforesaid error had crept into the order of the AO since there was no proper compliance at the assessment stage, since the assessee had objected to the very jurisdiction of ITO- Ward 51(4) who had issued the statutory notices. Though the Ld CIT (A) has called for a remand report, and the AO had furnished his report, however the AO remained silent on the issue of receipt of actual money/ sum in his report. We set aside the impugned addition back to the AO with a limited direction to verify and ascertain the fact as to whether the assessee had actually received any money/cash pursuant to this transaction from its holding company during AY 2013-14. If it is found that there the assessee company has not received money/cash from the holding company in the relevant AY 2013-14, then in our considered view Section 68 cannot be applied and hence the impugned addition shall stand deleted. - Appeal of the assessee is allowed for statistical purpose
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