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2022 (8) TMI 779 - AT - Income TaxAddition u/s 41(1) - Outstanding creditors / debts - assessee has not filed the confirmation from parties before the lower authorities. This balance is outstanding since 3 to 4 years - According to the AO, this credit was not proved by assessee - HELD THAT:- It cannot lead to the conclusion that the debt was ceased to exist on this reason and thereby it cannot be treated as income u/s 41(1). In this case the debts were appearing in the assessee’s books of accounts and also reflected in the assessee’s balance sheet for the year ended on 31.3.2008 and the balance sheet was duly signed by the assessee. Once the assessee signed the balance sheet, it means that all the debts therein was acknowledged by the assessee. As such, these debts cannot be considered as ceased to exist. Further, Hon’ble jurisdictional High Court in the case of CIT Vs. Alvares and Thomas [2016 (5) TMI 1150 - KARNATAKA HIGH COURT]- we are inclined to delete this addition on similar lines. Addition u/s 68 - difference in the brought forward opening balance in the cash book on 17.9.2007 - HELD THAT:- In our opinion, the closing balance as on 13.9.2007 should be the opening balance as on 17.9.2007 since there was no transaction between these two dates, though there was deposit into bank account on 17.9.2007. Thus, AO has taken only the difference between these two balances as income of the assessee. He ought to have considered the difference at Rs.4,30,130/- (Rs.2,05,130 + Rs.2,25,000/-). We are not enhancing the additions, since the revenue is not in appeal before us. However, we confirm the addition to the extent of Rs.2,05,130/- only. This ground of appeal is dismissed. Addition as unexplained cash credit u/s 68 - only reason for treating this amount as unexplained u/s 68 of the Act is that the assessee has not filed the confirmation letter from Bindu Promoters, Bangalore - HELD THAT:- The balance sheet of the assessee as on 31.3.2007, wherein this amount is duly reflected as receivable and same has been received by the assessee in AY 2008- 09. This claim of the assessee cannot be rejected without bringing any material on record to suggest that this is only accommodation entry. The plea of the assessee is to be considered as genuine unless proved otherwise. In the present case, revenue authorities have no material to suggest that the assessee has not received this amount from M/s. Bindu Promoters, Bangalore in this AY 2008-09. If the AO had any doubt, he could have very well verified the same with Bindu Promoters, Bangalore, which he failed to do so. In these circumstances, we have no hesitation in deleting addition by the AO to the tune of Rs.4.5 lakhs. Accordingly, this addition is deleted. Addition u/s 69 - unexplained investment - HELD THAT:- The valuation report collected by the AO from Mr. E. Umesh Sajjan dated 25.9.2007 shows no investment on this count. Hence, the assessee disputing the investment made by assessee at Rs.30,87,709/.-. The valuation report also does not show the investment made by assessee’s wife at Rs.11,85,000/-. Being so, there is inconsistency in the valuation report and the information obtained from the bank. In view of this, we are of the opinion that it is appropriate to remit the issue to the file of AO to consider the issue afresh after furnishing all the details of information collected by AO from bank to the assessee and to decide it afresh.
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