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2023 (5) TMI 318 - AT - Income TaxUnexplained cash credit u/s 68 - Assessee had made large cash deposits in bank accounts - HELD THAT:- The books, bills and vouchers, etc., were produced before the AO and were test checked, as noted in the assessment order itself. The books of account are, undisputedly, audited books of account and the Chartered Accountants have certified to have checked the books of account with the support of the bills and vouchers. No defect therein has been pointed out by the Auditors. And not only this, the AO has also admitted that the goods were supplied to the customers, against which, the advances were received, and there was only a small amount of advances which remained outstanding and adjusted at the end of the year. Even the AO himself has not doubted that the Assessee had conducted its business in a regular manner, from day to day, as described by the Assessee. AO has, thus, made the addition in question on the basis of mutually intrinsically contradictory observations made in the assessment order, which observations are not at all sustainable in the eye of law. CIT(A) too has not considered the controversy in its proper perspective in the light of the afore-discussed facts and circumstances. The contradiction in the assessment order is also clear from the fact that whereas on the one hand, the AO observed that the Assessee had no money in hand to make the deposits in its bank accounts and deposits were made out of the advances received from the customers, to the contrary, he states that the entire amount of advances received by the Assessee from its customers were unexplained cash credits. Even the amounts confirmed to have been paid as advances, were not considered as genuine advance receipt of goods. Not even an attempt has been made to establish the source of the money to make the deposits, in the absence of succeeding to refute the receipts of the amounts as trade advances. The Department, thus, has miserably failed to prove that the apparent is not the real, as required by ‘CIT Vs. Daulat Ram Rawatmull’ [1972 (9) TMI 9 - SUPREME COURT] The order under appeal is a result of mere conjectures and surmises - Addition u/s 68 cancelled - Decided in favour of assessee.
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