TMI Blog2006 (8) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the Tribunal on this issue, inasmuch as, on the basis of the findings recorded by it that these two amounts represented purchases made by the respondent-assessee on credit and the purchases and sales having been accepted by the department, the question of addition of the aforesaid two amounts u/s 68 of the Act did not arise inasmuch as the provisions of section 68 of the Act would not be attracted on the purchases made on credit. We, accordingly, answer the question referred to us in affirmative, i.e., in favour of the assessee and against the revenue. There will be no order as to costs. - HON'BLE R. K. AGRAWAL AND VIKRAM NATH, JJ. For the Appellant : Shambhoo Chopra For the Respondent : None JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,34,575/-? Inasmuch as the assessee was not able to give, according to the Income-tax Officer, satisfactory explanation with regard to the nature and source of the aforesaid deposits, and inasmuch as the addition in question on account of the said deposits would be more than ₹ 1,00,000, the Income-tax Officer again prepared a draft assessment order and sent it to the IAC in view of the provisions of section 144B(1) of the Act. In course of time the IAC gave hearing to the assessee and after hearing him he approved the proposed addition. Accordingly, the Income-tax Officer made the impugned addition. The assessee challenged the addition in question before the learned Commissioner of Income-tax (Appeals) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) before the Tribunal. The assessee also filed a cross objection before the Tribunal. The Tribunal, after considering the assessee s plea that the additions in question could not be made in terms of section 68 of the Act because the alleged deposits were not cash credits as presumed by the Income-tax Officer. The observations of the Tribunal were, inter alia, as below: We notice that the assessee has maintained regular books of account and that it has been dealing in purchase and sale of agricultural implements for a number of years in the past as well as in the future. The assessee s allegation, therefore, that he was engaged in the purchase and sale of agricultural implements, this year has to be accepted. In fact the assessee s tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons given by him. But the said finding does not automatically go to establish that the goods in question had not been purchased by the assessee during the year under consideration. The goods in question having been purchased and the profit arising therefrom having been accepted by the Income-tax Officer, it appears difficult for us to visualize as to how the debits made by the assessee with regard to the said purchases and the simultaneous credits to the sellers account could simultaneously be held by him to be cash credits. The credits in the accounts of the said two persons are admittedly on account of these two purchases. These purchases are not bogus, though the names of the persons, from whom the purchases have been made, are bog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppliers. Such a situation is not covered by section 68 of the Act. We, therefore, confirm the order of the learned Commissioner of Income-tax (Appeals) who deleted the addition made on account of such credits. In the result the departmental appeal stands rejected. 3. We have heard Sri Shambhoo Chopra, learned standing counsel for the revenue. He submitted that as the respondent-assessee was unable to produce the alleged creditors the provisions of section 68 of the Act was squarely attracted in the present case and the assessing authority has rightly added the two amounts at the hands of the respondent-assessee. According to him section 68 of the Act also covers up the case of purchases made on credit. 4. The submission is miscon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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