TMI Blog2010 (1) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly. Interest charged u/s 234B of the Act should be restricted to the levy made in 143(1) of the Act – Held that:- interest levied u/s 234B should be restricted to the levy made in the intimation u/s 143(1) is without much force. By virtue of amendment to Act by Finance Act, 2001, with retrospective effect from 1.4.1989, it beyond doubt interest u/s 234B is to be levied on the assessed income and not on the returned income, reassessment u/s 147, interest u/s 234B is imposable only on the amount on which interest was payable u/s 234B is increased. The Tribunal held since, there is excess payment of TDS and advance tax; no interest u/s 234B(3) could be imposed, there was a levy of interest u/s 234B in the intimation passed u/s 143(1), order of the authorities is correct and is in accordance with law and does not warrant any interference, appeal filed by the assessee is dismissed. - ITA No. 667/Bang/2009, - - - Dated:- 8-1-2010 - George George K., A. Mohan Alankamony, JJ. Ganesh Rao for the Appellant Jacinta Zimik Vashai for the Respondent ORDER George George K.:- 1. This appeal of the assessee, an individual, is directed against the order of the Ld. CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit balances brought forward from earlier years and therefore the same could not be added in the year under consideration. The appellant has also argued (although not very vehemently, I might add) that there was no remission or cessation of liability as required u/s 41(1) and, therefore, the AO was not justified in adding these amounts. These does not, I might add, seem to be any dispute about the other requirement of s.41(1), namely, that the amounts in question should have been allowed as an allowance or deduction to the appellant. 3.6. I am unable to agree with the appellant's argument that since a large chunk of what the AO added were brought forward balances; these could not be added in the year under consideration. The fact is that the appellant has provided a Balance Sheet drawn up based on its books of account in which certain amounts are being claimed as liabilities due to different parties as at the end of the accounting year in question. It is for the appellant to establish the genuineness of these liabilities by leading necessary evidence when asked to do so by the revenue authorities. The mere fact of liabilities being reflected against certain names in the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uj); (iii) B.V. Aswathiah and Brother vs. CIT 198 ITR 108 (Kar); (iv) CIT vs. Manohar Bandhu 148 ITR 108 (Bom); (v) Bijli Cotton Mills Pvt. Ltd vs. CIT, Lucknow 81 ITR 400 (All), and (vi) CIT, West Bengal-1 vs. Sanderson and Morgan 75 ITR 433 (Cal) 4. On the other hand, the Ld. DR was very emphatic in her resolves that the AO had analyzed the issues in depth, perused the confirmation letters perused/obtained and came to the conclusion that the brought forward sundry creditors to the tune of Rs.50.09 lakhs and the current year's creditors to the extent of Rs.14.99 lakhs were not genuine for the reasons set-out in her impugned order. Likewise, the Ld. CIT(A)'s too had discussed the issues in a comprehensive manner and arrived at the well reasoned conclusion that the AO was justified in bringing to tax the brought-forward creditors balances and current creditors balance. It was, therefore, pleaded that the stand of the authorities below be sustained in toto. 5. We have carefully considered the rival submissions and perused the relevant records. As could be seen from the assessment order that during the course of proceedings before the AO, the assessee had furnished a list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalyzed the issues, as extracted her findings in the fore-going paragraphs, and floored the assessee's contentions with facts and figures (in tabular columns). The bone of the contention of the assessee was that a sizeable amounts added by the AO related to credit balances brought forward from the earlier years and, therefore, the same could not be added in the year under consideration. Further argument of the assessee was that there was no remission or cessation of liability as required u/s 41(1) and, thus, the AO was not justified in adding these amounts. As rightly highlighted by the Ld. CIT(A), the assessee had provided a balance sheet drawn up based on his books of account in which certain amounts were being claimed as liabilities due to different parties as at the end of the accounting year under dispute. The assessee had in fact failed to establish the genuineness of these liabilities by citing credible evidence. Simply the liabilities being reflected against certain names in his books of account would not vouch the genuineness of such liabilities. On the other hand, the AO went to the root of the issue, made inquiries [calling for confirmation letters from the alleged credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r' in s.41 clearly refers to the actual receiving of the amount. It must be obtaining of the actual cash which is contemplated by the Legislature when it used these words. Therefore, the Tribunal's decision that the mentioned date was that when the HC pronounced its decision is incorrect. The amount was assessable in the AY in which it was received. 9. We have duly perused the finding of the Hon'ble Gujarat High Court which has no applicability to the issue on hand. (ii) B.V. Aswathiah and Brother vs. CIT 98 ITR 108 (Kar), the issue before the Hon'ble Court was whether Central Excise duty refund is taxable in the hands of the assessee in the year of receipt? Yes. (iv) CIT vs. Manohar Bandhu - 148 ITR 108 (Bom) - In fact, the verdict of the Bombay High Court was in favour of the Revenue; (v) Bijli Cotton Mills Pvt. Ltd. vs. CIT Lucknow - 81 ITR 400 (All) - the issue before the Hon'ble Court was change in method of distribution of yarn; (vi) CIT West Bengal vs. Sandersons and Morgan - 75 ITR 433 (Cal) The issue before the Hon'ble High Court was whether on the facts and in the circumstances of the case, a sum representing unclaimed balances in the account of the clients and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the authorities have erred in making addition of Rs.14.99 lakhs being 'current year's trade credits' u/s 68 of the Act as the said section applies to Cash Credits only. 14. Let us have a glimpse of what section 68 says:- "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 15. As rightly remarked by the Ld.CIT (A), the language in the section is unequivocally makes it clear that 'any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year'. Since, the assessee had failed to furnish convincing and documentary explanation with regard to the nature and source 'ther ..... 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