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2022 (11) TMI 1081 - AT - Income TaxUnexplained Cash Credit u/s. 68 - difference in the balance of certain creditors and also for non compliance on the part of sundry creditors in reply to notice issued u/s. 133(6) - HELD THAT - As the assessee provided complete details of sundry creditors along with the entries in the ledger account in order to show that various cheque return entries have been wrongly considered as purchases by ld.AO. We further find that the ld. CIT(A) after carefully examining the details filed by the assessee, deleted the addition. The above finding of the ld. CIT(A) stands uncontroverted by the ld.DR. Therefore, under the given facts of the case we failed to find infirmity in the findings of the ld. CIT(A). Thus, ground no.1 raised by the revenue is dismissed. Unexplained cash credit on account of sundry creditors balance - HELD THAT - As alleged addition is mainly on account of balance of the parties pertaining to the earlier year and transfer of balance of the group concern and thus we find no justification for making this addition. No interference is thus called for in the finding of ld. CIT(A) Thus, ground no. 2 raised by the revenue is dismissed. Addition u/s 69C of the Act for unexplained expenditure - difference in payments received by the vendor and the payments made by the assessee - CIT-A deleted the addition - HELD THAT - CIT(A) after considering the merits of the case and facts indicated that the said difference was on account of cash payment made for purchase of husk, which was used by power and fuel and these cash entries have been duly acknowledged by the seller. The above findings fact by the ld. CIT(A) remains uncontroverted by the ld. DR, Therefore, we failed to find any infirmity in the findings of the ld. CIT(A). Ground no. 3 raised by the revenue is dismissed.
Issues Involved:
1. Deletion of addition of Rs. 1,97,30,393/- considered as unexplained Cash Credit u/s. 68 of the Act. 2. Deletion of addition of Rs. 93,92,892/- considered as unexplained Cash Credit u/s. 68 of the Act. 3. Deletion of addition of Rs. 26,22,714/- considered as unexplained Expenditure u/s. 69C of the Act. Analysis: Issue 1: Deletion of addition of Rs. 1,97,30,393/- considered as unexplained Cash Credit u/s. 68 of the Act: The revenue challenged the deletion of this addition by the ld. CIT(A). The Tribunal found that the difference in the balance of certain creditors was due to cheque return entries not recorded in the ledger of suppliers. The ld. CIT(A) observed that the transactions were genuine as the appellant company provided complete details and the cheque return entries were part of the bank statement. Additionally, civil and criminal suits were filed against the company, indicating the genuineness of the transactions. Citing Section 68 of the Act, the Tribunal concluded that invoking it was unwarranted in this case. The Tribunal upheld the CIT(A)'s decision to delete the addition. Issue 2: Deletion of addition of Rs. 93,92,892/- considered as unexplained Cash Credit u/s. 68 of the Act: The revenue contested the deletion of this addition by the ld. CIT(A). The Tribunal noted that the ld. CIT(A) had considered the details submitted by the appellant, including transactions with the parties in question. The Tribunal found that the alleged addition was mainly due to balances from earlier years and transfers within group concerns, which were adequately explained by the appellant. The Tribunal agreed with the CIT(A)'s decision to delete the addition, as there was no justification for it. Issue 3: Deletion of addition of Rs. 26,22,714/- considered as unexplained Expenditure u/s. 69C of the Act: The revenue appealed the deletion of this addition by the ld. CIT(A). The Tribunal reviewed the case where a vendor showed a difference in payments received and made by the assessee. The ld. CIT(A) accepted the explanation that the difference was due to cash payments made for husk purchases, acknowledged by the seller. The Tribunal concurred that the expenditure was satisfactorily explained, as evidenced by the acknowledgment of sales and payments. Citing Section 69C of the Act, the Tribunal found no grounds for invoking it in this scenario and upheld the CIT(A)'s decision to delete the addition. In conclusion, the Tribunal dismissed the revenue's appeal, affirming the decisions of the ld. CIT(A) regarding all three issues.
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