Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 1012 - AT - Income TaxAddition u/s 68 - difference in closing balance as per the books of the Appellant and Debtor - HELD THAT:- Documents placed by the assessee before the Revenue authorities sufficiently discharge the onus towards the identity and genuineness of the transaction and creditworthiness of the lender contemplated under s.68 - the statutory discretion available to AO under s. 68 of the Act ought to have been exercised in favour of the assessee. The action of the Revenue authorities thus cannot be countenanced having regard to the extenuating circumstances existing in the case. The addition made under s.68 of the Act on credit received from Rakesh Swadia therefore deserves to be reversed and cancelled. For another credit of ₹ 1 Lakh from Khemka Udyog, it is the case of the assessee that the relevant confirmation from the lender towards repayment of loan could not be furnished due to strained relations cropped up owing to some dispute. The assessee, however, adverted to the bank statement of the assessee to show that an amount of ₹ 51,070/- was promptly repaid on 30.08. 2012 against the credit received on 03. 08. 2012 which proves the bonafides of the credit received from Khemka Udyog. It is also fairly submitted that additions may, at best, be restricted to the balance amount remaining unpaid. Having regard to the fact of repayment of credit to the extent of ₹ 51, 070/-, we find merit in the plea of the assessee for claim of bonafide to the extent of at least ₹ 51,070/-. The additions on this score is therefore restricted to ₹ 48, 930/- and the remaining amount of addition of ₹ 51,070/- is reversed. Reconciliation difference in the closing balance as per the books of account of the assessee and that of debtor M/s. PSL Ltd. -We find the following contentions raised on behalf of the assessee to be noteworthy: (i) no copy of ledger accounts in the books of debtor (PSL Ltd.) was collected by the AO while relying upon the outstanding balance declared by the Chartered Accountant of PSL Ltd. The Chartered Accountant showing confirmation was stated to be mandated by ICICI Bank Ltd. to carry out satisfactory audit of the PSL Ltd.; (ii) no transactions have been carried out during the year with PSL Ltd. and the difference in balance, if any, relates to some earlier year and therefore no event has occurred during the year for taxation purposes; (iii) the excess balance, if any, when received from the party by the assessee would be eventually become taxable in the year of receipt and therefore the entire exercise is, in fact, tax neutral; (iv) the CIT( A) by way of cryptic and non- speaking order confirmed the stand of the AO without taking note of the glaring facts. For the reasons noted above, we find great force in the plea of the assessee for reversal of additions made on account of so called difference in balances.
|