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2022 (3) TMI 894 - AT - Income TaxAdvance to the company from out of the cash receipt - addition on protective basis - CIT(A) deleted the addition made by the AO on the ground that since the sources and creditworthiness were proved in the substantive assessment, protective assessment did not have legs to stand - HELD THAT:- If a protective assessment is to be invoked u/s 68 of the Act, the conditions laid down in section 68 should be satisfied. The assessee has offered explanation to the satisfaction of the AO on the credit worthiness and the source of funds deposited into the bank account of the company. This was not disputed by the AO in his order. The AO has also not rejected the explanation, by the company, where it is implied that the AO has accepted the source. In this case also the assessee has provided explanation regarding the source of cash deposits, and has also accepted the real estate income, filed revised return and discharged his liability in payment of taxes. We find from the order of Ld.CIT(A) that the addition of ₹ 1,74,52,500/- made on substantive basis since the loan creditor provided evidences to the satisfaction of Ld.CIT(A). As the assessee has provided documentary proof for receipt of money during the substantive assessment of the company, the addition of the same on the basis of protective assessment does not have legs to stand - impugned addition shall be deleted - Decided in favour of assessee. Receipt of cash - Valid proof - CIT(A) ought not have accepted the assessee’s claim rejected in the absence of valid proof and should have rejected the mere entry in the creditor’s books of account - HELD THAT:- As assessee has advanced a sum of ₹ 5.20 crores to M/s Gowtham Buddha Textiles Pvt. Ltd. out of the real estate income admitted by the assessee. We see from the record submitted by the Ld.AR that the assessee has shown the amount of ₹ 5.20 crore as investment in his books of accounts. We also find that this fact was also recorded by assessee to Q No 7 in his sworn statement during the course of scrutiny assessment in the case of Gowtham Buddha Textile Park Pvt. Ltd, for the A.Y. 2014-15 to 2017-18 u/s 131 of the Act. We therefore find no merit in the argument of the Ld.DR and, we dismiss the ground raised by the revenue. In the result, appeal filed by the revenue is dismissed.
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