TMI Blog2011 (9) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... credit u/s 68 of the I T Act, without giving any show cause notice to the appellant. iii) The CIT(A) has not raised any query and/or not asked the appellant to submit any explanation and without intimating the appellant initiated sec 68 of the I T Act. The Assessing Officer has never scrutinized the books and records and concluded that these are advances from debtors. iv) The opening balances of earlier years (brought forward from earlier years) cannot be added u/s 68 in the AY 2005-06 by the CIT(A) v) The CIT(A has not served any show cause notice before the impugned additions. vi)The CIT(A) erred in sustaining adhoc disallowance of ₹ 7643/- out of telephone expenses and ₹ 14139/- being 10% of car maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in respect of other two parties, the Assessing Officer treated the difference in case of two parties as well as the amount standing in the name of the other two partied totalling to ₹ 9,19,964/- as cessation of liability and brought to tax as assessee's income u/s 41(1) of the Act. 3.3 On appeal, the CIT(A) deleted the addition made in case of Soft Sule Ltd of ₹ 1,35,000/- and also accepted the contention of the assessee that the advances cannot be assessed u/s 41(1) of the I T Act. However, the CIT(A) has held that the assessee has not explained the source of these credits with evidence as per sec. 68 of the I T Act and accordingly, confirmed the addition to the extent of ₹ 8,79,964/-. 4. Before us, the ld AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the earlier year; but the addition was confirmed by the CIT(A) on the ground that the assessee has to explain the source of the creditors with evidence; therefore, the contention of the assessee was not accepted. 5.1 The provisions of section 68 manifest the sum found credited in the books of the assessee for any previous year, and the assessee fails to offer the nature and source thereof or the explanation offered is not found satisfactory then, the sum so credited may be assessed as the income of the assessee of that previous year. Section 68 reads as under: Sec. 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 sou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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