TMI Blog2015 (9) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... tors/suppliers. It is also observed that the resultant profit arising from the relevant transactions of purchase and sale of sunflower seed was duly disclosed by the assessee in the trading account. Thus addition u/s 68 deleted - Decided in favour of assessee. Unexplained expenditure under section 69C - whether the amounts in question representing liabilities which had ceased to exist could be added to the total income of the assessee alternatively under section 41(1) as contended by the learned D.R? - Held that:- The two amounts in question have not been paid by the assessee till date nor any party has demanded the said amounts appearing in the books of account of the assessee as liabilities. Since the said amounts represented liabilities of the assessee on account of purchases which had been claimed as expenditure in the earlier years, we are of the view that the provisions of section 41(1) are clearly applicable when it is established that the said liabilities as shown by the assessee actually ceased to exist in the year under consideration itself. We, therefore, confirm the addition made on this issue by invoking the provisions of section 41(1) - Decided against assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law as the Assessment Order passed under Appeal has become barred by limitation on 31.03.2010 and such an Order to give effect to direction of the Hon'ble Tribunal can only be passed by invoking provisions of Section 150(1) which the Assessing Officer having failed to do, the Assessment stands barred by limitation. 7. The reasons assigned by the Ld. CIT(A) are wrong, insufficient and illegal. 8. Any other ground that may arise at the time of hearing of the appeal. 2. As submitted by the Ld. Counsel for the assessee at the time of hearing before us, Ground Nos. 1, 2, 5, 7 and 8 are general in nature which do not call for any specific adjudication. 3. The issue involved in ground No.3 relates to the addition of ₹ 54,49,961 made by the A.O. under section 68 of the Act and confirmed by the Ld. CIT(A) treating the amount payable by the assessee to farmers towards purchase of sunflower seeds as unexplained cash credits. 4. Apropos, this issue raised in ground No.3, the relevant facts are that the assessee is a partnership firm which is engaged in the business of manufacture and dealers in edible oils. The return of income for the year under consideration wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the assessee under section 68 of the Act. 5. On appeal, the Ld. CIT(A) confirmed the addition made by the A.O. under section 68 observing that the primary onus to explain the relevant credits was on the assessee and the assessee having failed to discharge the said onus satisfactorily, the addition made by the A.O. under section 68 was fully justified. 6. We have heard both the sides and also perused the relevant material available on record. The learned D.R. has strongly relied on the order of the authorities below in support of the Revenue's case on this issue. However, as rightly submitted by the Ld. Counsel for the assessee, the impugned credits being trade credits of the assessee on account of purchase of sunflower seeds are not in the nature of cash credits as envisaged under section 68 and the same therefore cannot be added to the income of the assessee by invoking the said provision. Moreover, as pointed by him from the trading account of the assessee for the year under consideration placed at page No.24 of the paper book, the corresponding seeds purchased from the seven farmers for ₹ 54,49,961 were sold in the year under consideration itself for ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reddy Oil Ltd., and Krishnaveni Agro Tech Products under section 68 were challenged by the assessee in an appeal preferred before the Ld. CIT(A). Before the Ld. CIT(A), the assessee failed to reconcile the difference appearing in the accounts of the two parties as per its books of account and as per the books of the said two parties. As regards the alternative contention of the assessee that the amounts appearing in the name of the said two parties being trade credits could not be added as unexplained cash credits by virtue of provisions of section 68, the Ld. CIT(A) found merit in the same. He however held that the corresponding amounts representing purchases made by the assessee could be added as unexplained expenditure under section 69C since the source of payment of such expenditure was not satisfactorily explained by the assessee. He therefore confirmed the addition made by the A.O. on this issue by applying the provisions of section 69C instead of the provisions of section 68 as applied by the Assessing Officer. 10. We have heard the arguments of both the sides and also perused the relevant material on record. Although we find merit in the contention of the Ld. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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