TMI Blog2015 (7) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced own cash it has been shown as income and it could be adjusted against the business loss. The ld DR has not controverted the finding given by the ld CIT(A). Therefore, we uphold the order of the ld CIT(A) - Decided against revenue. Disallowance U/s 40A(3) - the assessee had adjusted the creditors against the debtors on 31st March, 2008, which is covered U/s 40A(3) - CIT(A) deleted the addition - Held that:- As per record, these entries were made with the consent of creditor and debtors. These creditors were pertained to earlier year, which has been debited in A.Y. 2007-08 whereas the year under consideration is 2008-09. The ld CIT(A) also relied upon the decision of Coordinate ITAT, Ahmadabad Bench in the case of Anand Kumar Rawatram Joshi Vs. ITO (2011 (11) TMI 98 - ITAT, Ahmedabad) and Tushar A Sanghvi (HUF) Vs. ITO (2012 (6) TMI 594 - ITAT AHMEDABAD ), on identical issue, which has not been controverted by the ld DR. The Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Kishan Chand Maheshwari Dass [1979 (9) TMI 58 - PUNJAB AND HARYANA High Court] wherein identical issue has been decided in favour of the assessee and held no violation U/s 40A(3) of the Act. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as claimed in the statement. g. The assessee had not submitted any written document which proved that he had entered in some agreement of share trading with Praful Patel. It is concluded that the assessee had failed to discharge his onus in respect of the cash introduced by him in the name of Praful Patel in his books of account. Therefore, he made addition of ₹ 9,36,240/- in the income of the assessee as unexplained cash credit. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who had deleted the addition made by the Assessing Officer by observing as under:- I have duly considered the submissions of the appellant. On perusal of the assessment order, it is seen that the A.O. was of the opinion that the appellant had deposited his own undisclosed cash in the name of Sh. Praful Patel in his books of account. It was alleged that no confirmation was filed in this regard from Sh. Praful Patel. The A.O. held that the appellant had failed to prove the creditworthiness and genuineness of the said creditor. The A.O., therefore, made an addition of ₹ 9,36,240/- to the income of the appellant. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 9,36,240/- made by her. This ground of appeal is allowed. 4. Now the Revenue is in appeal before us. The learned D.R. vehemently supported the order of the Assessing Officer and argued that the creditworthiness and genuineness of credit has not been proved by the assessee; identification and confirmation was not provided by the assessee and repayment of cash/loan have not been made. On the other hand, the loan is not appearing in the balance sheet and the assessee had not declared any loss from sale trading as claimed in the statement recorded on oath U/s 131 of the Act. The assessee had not produced any document which proved that he entered in share trading with Praful Patel. Therefore, he requested to reverse the order of the ld CIT(A). 5. At the outset, the ld AR of the assessee has supported the order of the ld CIT(A) and argued that the assessee was in derivative transaction of shares. There was a loss in the derivative transaction, which was settled with Shri Praful Patel, which has been shown as income against the derivative transaction loss. Finally the assessee has shown receivables from Sh Praful Patel at ₹ 78,068/-, which has been also reflected in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account as violation U/s 40A(3) of the Act, therefore, he disallowed whole amount by presuming that these amounts might have paid how unaccounted money. Therefore, he made addition of ₹ 10,85,782/- U/s 40A(3) of the Act. 8. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who had deleted the addition made by the Assessing Officer by observing as under:- I have duly considered the submissions of the appellant. During the year under reference, the appellant had squared off certain credit balances of the creditors brought forward from the earlier years by transferring the same to the account of other parties having debit balances. The relevant journal entries were passed with the consent of both the creditors and debtors and the appellant did not have any malafide intention to avoid any tax liability. The A.O. on the other hand invoked the provisions of section 40A(3) and treated the same as payment otherwise than by account payee cheque or crossed bank draft to the various creditors from whom purchases had been made in the preceding years. Since the purchases had been debited in the books of account for the ea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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