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2021 (5) TMI 250 - AT - Income TaxAddition u/s 68 - non maintenance of books of accounts - AO has given notice u/s. 133(6) of the Act to the sundry creditors and advances from customers and when none of these could be served, the assessee came with this explanation that there was bogus accounting by the accountant of the assessee - HELD THAT:- As fixed deposits were made by the assessee over a period of time during the AYs 2012-13, 2013-14, 2014-15 & 2015-16. This is evident from the record. It is also recorded by the AO that these sundry creditors and advances from customers appearing in the balance sheet are bogus and that no such creditors or customers exist. If on the asset side of the balance sheet the fixed deposits belonging to the earlier assessment years are taken as the opening balance as these are brought forward from earlier year, then in the liability side of the balance sheet, the amount received from the sundry creditors and advances from customers should be opening balances or deleted. It is clear from the balance sheet that the figure of sundry creditors and advances from customers is only balance sheet figure to counter the asset in the form of fixed deposit brought in as an asset in the balance sheet this year. The figure of sundry creditors and advances from customers are not of any cash or credit amount received by the assessee. There was no actual credit of cash or otherwise received by the assessee. No entries are made in the books of account as admittedly no books of account are maintained. Thus based on the real income thereon no addition can be made based on these false or bogus figures. No addition can be made u/s. 68 of the Act unless the assessee maintains books of account as held by the Hon'ble Bombay High Court in the case of CIT vs. Bhaichand N. Gandhi [1982 (2) TMI 28 - BOMBAY HIGH COURT] and in the case of CIT Vs. Ms. Mayawati [2011 (8) TMI 12 - DELHI HIGH COURT] An addition u/s. 68 of the Act was made on bogus figures which are not true and when no such entries were made in the books of account. In view of the above discussion, we delete the addition made u/s. 68 of the Act on facts of this case. This ground of the assessee is allowed. Addition in this year can be made u/s. 69 - We restore the matter to the file of the AO for fresh adjudication in accordance with law. The AO shall consider by the investments in the fixed deposits and interest thereon were brought to tax in the earlier assessment years i.e. AYs 2012-13, 2013-14, 2014-15 & 2015-16 or not. The AO, as per law is permitted to re-open the assessment of those earlier years on bringing them in case if any to tax.
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