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2022 (5) TMI 511 - AT - Income TaxAddition u/s 68 - Cash deposits into bank account of the assessee - CIT(A) deleted the addition made u/s 68 holding that the assessee has proved the identity, creditworthiness of the transaction which was made with its sister concern - assessee contended that the company became sick and could not pay the loans to the creditors, bankers and there was one-time settlement offered to the assessee and the business was completely closed down and in fact there was an auction notice issued by Haryana Financial Corporation and the assessee in order to pay one-time settlement and the other dues sold scrap and the sale proceeds were deposited into bank account and the loans were discharged by utilizing the sale proceeds and Assessing Officer in the absence of any further details treated the cash deposits of Rs.36,25,000/- as unexplained cash credits u/s 68 - HELD THAT:- As decided in P. MOHANAKALA [2007 (5) TMI 192 - SUPREME COURT] in order to attract the scope of section 68 of the Act the assessee offers no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee in the opinion of the Assessing Officer is not satisfactory. It is only then the sum so credited in the books may be charged to Income tax as income of the assessee - the expression “the assessees offered no explanation” means where the assessee offers no proper reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. Here in the case of the assessee, the assessee has given an explanation that the credit entries in the bank account are relating to sale of scrap and the original vouchers were also furnished before the Assessing Officer in the remand proceedings. On examination of all the original vouchers the Assessing Officer could not point out any discrepancy in the vouchers. Therefore, the assessee has discharged its initial onus and there was no further enquiry by the Assessing Officer in the remand proceedings though requested by the assessee to summon the vendors. Therefore, taking the totality of facts and circumstances into consideration, we hold that the cash deposits made into bank account by the assessee are nothing but the sale proceeds of scrap sales and the Assessing Officer should not have treated such scrap sales as unexplained cash credits u/s 68 of the Act. Thus, we direct the Assessing Officer to delete the addition made u/s 68 of the Act and re-compute the income of the assessee accordingly. Grounds of appeal of the Assessee are allowed.
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