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2023 (6) TMI 180 - ITAT PUNEAddition u/s.68 - unexplained share capital - CIT(A) deleted the addition by accepting the assessee’s contention that the credit to share capital was only through journal entries - HELD THAT:- Assessee transferred Rs.6.00 crore to share application money account from various accounts and all the transfers were made out of respective opening balances. Once the position is such, we fail to understand the logic of the addition u/s.68 just on the passing of transfer entries. Present AO of the assessee, appeared before the ld. CIT(A) on 29-07-2019, who: “affirmed that share capital of Rs.6,00,00,000/- was not received in the current year and unsecured loans/sundry creditors were converted in the share capital”. Thus, it is abundantly clear that the transfer to share capital account was only by means of transfer entries, which, obviously, cannot lead to addition u/s.68 - Decided in favour of assessee. Addition u/s 41(1) - HELD THAT:- This section gets triggered on cession of trading liability. If the amount is still payable and the assessee admits the liability to pay, no addition can be made under this provision. Here is a case in which the assessee categorically admitted before the ld. CIT(A) that the accounts with these suppliers/creditors were running and continuous. Nothing has been brought on record to controvert this submission of the assessee. If the accounts are running and continuous and the assessee admits the amounts still to be payable, obviously section 41(1) cannot be invoked. - Decided in favour of assessee. Addition of advances received during the year - as per AO since the assessee was not carrying on any business operations held that, in the absence of any confirmation about the genuineness of the creditors, the amount was liable to be added - CIT noticed that there were opening balances in these accounts, thus directed to delete the addition to this extent and upheld the remaining addition - HELD THAT:- There can be no case of the Revenue for confirming the addition because the opening balances cannot be added in the assessment of the current year. Once the ld. CIT(A) has recorded that there were opening balances to the extent of Rs.6.06 crore, which finding has remained uncontroverted on behalf of the Revenue, we find no reason to disturb the same. The impugned order is, therefore, upheld on this score as well.
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