Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 533 - AT - Income TaxAddition u/s 68 - bogus liability allegedly shown by the assessee - HELD THAT:- Although the assessee-firm did not make any entry in its books of accounts on receipt of the shares on loan as the same was not required, the proper accounting entries on sale of shares were duly passed in the books of accounts of the assessee showing the value of sale proceeds as the liability of the assessee-firm to the concerned creditors. Although the assessee, as submitted before the authorities below as well as before us, was required to repay the said liability in the form of shares and not the value, we find that assigning the value of sale proceeds of the shares actually realized to the concerned creditors was fair and proper in the facts and circumstances of the case including especially the fact that the difference on the date of purchase of shares for returning back to the concerned creditors was liable to be declared by the assessee as profit or loss as the case may be as agreed even by the assessee. The shares owned by the concerned creditors were given on loan by them to the assessee to discharge its liability of margin payment through demat account and on sale of the same by the main broker M/s. Khandwala Integrated Financial Services Pvt. Ltd., the liability was duly recognized by the assessee towards the concerned creditors in its books of accounts at the value of sale proceeds actually realized. All these transactions were duly supported by the documentary evidence produced by the assessee; and, the AO in our opinion, was not justified to doubt the genuineness of the said transactions on the basis of some frivolous objections which have been duly clarified and met by the assessee. It appears to us that the nature of transactions as well as the modus operandi involved in the same was not properly understood by the AO while doubting the genuineness of the same while CIT(A) not only understood the same properly but also appreciated the exact nature of transactions to hold that the said transactions were genuine which were entered into by the assessee in the normal course of its business as a dealer in shares. Moreover, the identity and capacity of the concerned creditors as well as genuineness of the relevant transactions involving shares taken by the assessee on loan was duly established by the assessee on evidence and the learned CIT(A), in our opinion, was fully justified in deleting the addition made by the Assessing Officer by treating the said transactions as unexplained cash credit under Section 68 - Decided against revenue.
|