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Income Tax Officer, Ward-1, Sikar Versus Vishwa Nath Bidawatka

2015 (10) TMI 2436 - ITAT JAIPUR

Addition u/s 68 - Held that:- It is clear and beyond any doubt that the unsecured cash creditors in respect of which the additions were made by the Assessing Officer u/s 68 of the Act has been examined in detail by the ld CIT(A) and he has given a clear finding that all the aforesaid cash credits were admittedly old and balances therein reflected only the brought forwarded balances. The Assessing Officer in his remand report has also not disputed this fact. In the light of these uncontroverted f .....

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that:- We have gone through the order of the ld CIT(A) and we do not feel any infirmity in the said order. Neither the revenue has brought any further facts to prove that this payment of interest to the creditors were not genuine or bogus - Decided in favour of assessee. - ITA No. 381/JP/2013 - Dated:- 7-9-2015 - The AO however held that The explanation submitted by the assessee is not at all satisfactory, therefore, ₹ 24,62,014/- found credited in the books of accounts of the assessee is .....

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are appearing in the books of account of the assessee. 3.1 During the course of appellate proceedings before the ld. CIT(A), the assessee reiterated its earlier position and submitted additional evidences in the form of confirmation letters, which were admitted by the ld CIT(A). Further the ld CIT(A) has held that the issue can be decided even without considering these additional evidences. Since all the aforesaid cash credits were admittedly old and balances therein reflected only the brought .....

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s, it is necessary to have the confirmations on record. Merely for the reason that the loans are old and of earlier years, the sources with the assessee in form of unsecured loans cannot be accepted. 3.3 We have heard the rival contentions and pursued the material on record. Firstly, reference can be drawn to Section 68 of the Act wherein it is stated as under:- Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation ab .....

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s under:- 8. Generally, the financial year immediately preceding the assessment year is the previous year as covered by section 3(1)(a) but the assessee has been given an option by law under section 3(1)(b) to make up his accounts on the basis of a twelve-month period starting from any odd day of the year and in that case so far as the assessee is concerned it will be his previous year. We see no justification for giving a different connotation to the term previous year for the undisclosed incom .....

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f that previous year". These are decisive words. Can we say that when the statute provides a precise method for the taxing of an unexplained cash credit entry in the assessee's books of account, any option is available to the department to shift the opted previous year enabling it to rope in the unexplained entry? The answer is plainly in the negative. In this context a reference to section 69 would further illuminate the intention of the legislature. It provides that where in the finan .....

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the phraseology of sections 68 and 69 indicates that for the purposes of an unexplained income which is contained in the books of account it is the assessee's previous year which shall be the relevant period for including such an unexplained credit but where the investments are not contained in any books of account and they are unexplained or the explanation is unsatisfactory the value of the investments shall be deemed to be the income of the assessee for the financial year preceding the a .....

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precisely locate their date of acquisition. In such a situation law permits the department to deem that it accrued in the preceding financial year for the purposes of roping in such income to tax. 3.4 Now coming the facts of the instant case, it is clear and beyond any doubt that the unsecured cash creditors in respect of which the additions were made by the Assessing Officer u/s 68 of the Act has been examined in detail by the ld CIT(A) and he has given a clear finding that all the aforesaid c .....

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