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2016 (2) TMI 1359 - AT - Income TaxUnexplained cash credit u/s 68 - Unexplained cash credit - HELD THAT:- It was a case of advances received by the assessee in cash from his dealers and the same having been adjusted against the sale subsequently made to the said dealers, there was no reason to apply the theory of preponderance of probabilities, especially when there was nothing brought on record to doubt the explanation offered by the assessee. There was also no inquiry made by the AO with the concerned dealers to establish that what was stated by the assessee is not correct. On the other hand, at least two dealers were produced by the assessee for verification before the AO and they admitted of having been given the cash advances to the assessee. Having regard to all these facts of this case, advances except the advance received by the assessee on 30.03.2009 having been already adjusted against the sales made by the assessee to the concerned Dealers and the sales so made having been duly accounted for by the assessee, the corresponding advances could not be added to the total income of the assessee u/s 68 treating the same as unexplained. As regards the advance claimed to be received by the assessee we however, find that the assessee has failed to explain the same in terms of section 68 and the addition made by the AO and confirmed by the CIT(A) to this extent is liable to be sustained. Appeal of the assessee is partly allowed.
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