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2022 (7) TMI 259 - AT - Income TaxAddition u/s 68 - amounts were stated to have been received by way of foreign inward remittance from the lender who claims to be British Nationals and persons of Indian origin - As per assessee amount was received in pursuance of collaboration agreement to pursue certain business interest in the form of 35% share in 'Harsha K3C Mall Cinema Karnal' - HELD THAT:- As the bona fides of the loan/deposits transaction in question with Shri Ashok Kumar Verma, in our view, is beyond any iota of doubt. The CIT(A) has grossly ignored these self explanatory documents to come to a conclusion adverse to the assessee. The action of the CIT(A) cannot be justified in view of formidable documentary evidences noted above. The confirmation of money lent is self evident from compromise carried out. The action of the CIT(A) is thus set aside and the Assessing Officer is directed to cancel the additions so made under Section 68 of the Act. Addition towards unexplained advance from customer - HELD THAT:- The assessee has submitted party-wise explanation towards advances received from different customers - the action of the CIT(A) for sustaining the addition to the extent of Rs. 4,89,744/- in respect of above noted customers is wholly unjustified and liable to be reversed. Addition on account of flat customers - HELD THAT:- The consideration for receipt of business advance stands proved. The action of the CIT(A) thus cannot be faulted. Addition on account of 'other liabilities' payable to banks as shown in the financial statement of the assessee on the ground that such liability was not confirmed from the respective banks - Assessee contends that the liability shown against the banks are not actual or real liabilities but on account of journal entry passed by increasing the book overdraft and reducing the corresponding creditors liability and has made additions in respect of above liability on the ground that respective banks have not confirmed the above stated liabilities owing to wrong appreciation of these facts - CIT-A deleted the addition - HELD THAT:- CIT(A) has failed to determine the bona fides of the liabilities and has hurriedly relied upon the narrative canvassed on behalf of the assessee and that too, without waiting for any verification report of the Assessing Officer. The bank reconciliation statement claimed to have been referred by the CIT(A) does not prove stand of the assessee towards discharge of liabilities or bona fide of outstanding liability in any manner. No justification in the reasoning of the CIT(A) which is contrary to the factual position on record. It is the admitted position that no documents were filed before the Assessing Officer. The documents filed before the CIT(A) neither supports the claim of assessee nor unverified by the Assessing Officer - CIT(A) himself has opted to make no independent inquiry and has mechanically accepted the explanation offered by the assessee which does not appear to be backed by any sound basis. Therefore, the action of the CIT(A) for reversal of addition in relation to Bank of Baroda and Punjab National Bank is bereft of any sound factual basis. The Assessee has failed to discharge the onus which lay upon it to offer satisfactory explanation on inflated Bank liability. Hence, the action of the Assessing Officer is restored. Addition on account of cessation of liability - HELD THAT:- As outstanding liability, however, is claimed to be disputed by the assessee and pending before the Court. As emerges from record, the assessee entered into agreement with Techsoft Global Pvt. Ltd. and received some amount against it. A civil suit was filed by M/s. Techsoft Global Pvt. Ltd. for recovery of advance paid as token money. Revenue could not provide any justification on nature of dispute to the extent of Rs. 2,46,880/- and how this figure has been determined by the Revenue. In the absence of any explanation from the Revenue and on examination of the findings recorded by the CIT(A), we do not see any reason to interfere with the order of the CIT(A). Ground No. 2 of the appeal of the Revenue is dismissed.
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