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2021 (7) TMI 978 - AT - Income TaxAddition u/s 68 - related party transaction - CIT(A) has returned a finding of fact that, provisions of section 68 are in applicable, as assessee has proved the identity of the creditor capacity as well as the genuineness of the transaction - HELD THAT:- Manpower supply service charges paid by assessee, CIT(A) notes that as long as M/s. LDC Holding Pvt. Ltd. is genuine, no addition could be made in the hands of assessee under section 68 - assessee had filed ledger accounts showing the payments made to LDC Holdings Pvt. Ltd., in respect of manpower supply service charges and that in the subsequent financial year the entire amount outstanding was paid by assessee. It is also been recorded by the Ld. CIT(A) that provisions of section 68 of the Act would not have any application to the said liability shown by assessee to M/s. LDC Holding Pvt., for the year under consideration. No-fault could be profound in the view taken by the Ld. CIT (A). Merely because M/s. LDC Holding Pvt. Ltd., outsourced solar plant installation work to a third-party, would not make the transaction to be bogus. Similarly, in respect of manpower supply charges paid by assessee, except for the allegation by the Ld. AO that the employees who rendered services to assessee were related to the director of assessee would not lead to a conclusion that the necessity of such services were not required by assessee. In any case there is no evidence brought on record by the Ld. AO that assessee was not in requirement of any manpower supply services or that the solar plant machine was not installed by assessee. Application of section 68 - The amount under consideration are expenses in the hands of assessee. Section 68 cannot be applied in the present facts of the case as there is no cash credits in the books of account of assessee. Thus in our view addition made in the hands of assessee by invoking provisions of section 68 are misconceived and has been rightly deleted by the Ld. CIT(A). - Decided against revenue.
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