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Anjani Agro Implements Pvt. Ltd. Versus The ITO, Ward 2 (1) (1) , Mumbai

2016 (9) TMI 1214 - ITAT MUMBAI

Unexplained cash credit - addition u/s 68 - increase in sundry creditors as at the end of the year - Held that:- As from the material and evidence on record, the complete details of the impugned credits was made available to the Assessing Officer. The two creditors responded to the enquiries carried out by the Assessing Officer and confirmed the transactions. There is no material led by the Revenue to show that any of the evidences produced before him was wrong or otherwise not credible. The exp .....

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r section 68 of the Act is not static, inasmuch as it shifts to the Revenue depending on the material and evidence led by the assessee at a given stage. The Assessing Officer had before him the averments of the sundry creditors, the income tax details of the sundry creditors, the balance sheets of the two creditors which showed the amount in question, etc. By merely pointing out that further evidence in the shape of bank account of the creditors was not available, does not distract from the fact .....

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to establish any falsity or untruth in the same. Therefore, AO was wrong in holding that the explanation rendered by the assessee was not satisfactory within the meaning of section 68 of the Act. Thus we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the addition made under section 68 of the Act. - Decided in favour of assessee. - ITA No. 7556/Mum/2012 - Dated:- 19-8-2016 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER For The Appellant : S .....

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y, it has filed revised Grounds of appeal, which read as under:- 1. The learned CIT(A) failed to appreciate that increase in sundry creditors of ₹ 55,71,480/- being expenditure INCURRED in earlier years by tenants namely Mr. Suresh Chandra Taparia and Smt. Srikanta Devi Taparia on behalf of Assessee Company without appreciating that Assessee had discharged its onus u/s 68 and hence addition of ₹ 55,71,480/- u/s.68 may be deleted. 2. The Appellant craves leave to add, amend, alter or .....

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S.68. 2. The appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal. 3.1 In support of its admission, it has been canvassed that it is a legal ground and is permissible to be raised following the ratio of the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company vs. CIT, 229 ITR 383(SC). 4. The solitary dispute in this appeal relates to the action of the income tax authorities in holding that a sum of ₹ 55,71,480/- rep .....

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144 of the Act on 29/01/2004, the total income was assessed at ₹ 65,95,690/-. In such assessment increase in the sundry creditors of ₹ 55,71,480/- was held to be an unexplained credit under section 68 of the Act. When such assessment was carried in appeal before CIT(A), the assessee submitted that the increased balance of sundry creditors represented amount due to two of its tenants, namely, Shri. Suresh Chandra Taparia and Smt. Srikanta Devi Taparia to whom assessee had given its f .....

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the Assessing Officer, the CIT(A) deleted the addition, which was carried in appeal before the Tribunal by the Revenue. The Tribunal vide its order dated 9/2/2011 noticed that adequate opportunity was not allowed by the CIT(A) to the Assessing Officer to examine the details filed by the assessee and, therefore, the matter was restored back to the file of the Assessing Officer for a fresh decision. Following the said direction of the Tribunal the Assessing Officer has passed the impugned order, .....

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ecting amounts due to them from the assessee company, their confirmation letters and their statement of accounts showing details of the payees with cheque numbers and amount of expenditure incurred by them for renovation of the aforesaid flat, etc., completely explained the credits in terms of section 68 of the Act. The assessee also pointed out that in response to notices issued by the Assessing Officer under section 133(6) of the Act the two creditors appeared and confirmed the transactions. T .....

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Ld. Representative for the assessee vehemently pointed out that the details submitted by the assessee clearly established the identity and creditworthiness of the creditors as also the genuineness of the transactions. In this context, assessee pointed out that the various details submitted in support of the impugned credit show that the same reflected only increase in the balance of the creditors and was on account of expenses incurred by the creditors on repairs of the premises during the perio .....

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Copy of letter dt. 8/7/1999 submitted by Shri Suresh Chandra Taparia viii. Copy of Balance confirmation by Shri Suresh Chandra Taparia ix. Copy of I.T Acknowledgement of Shri Suresh Taparia for the A.Y 1999-2000 x. Copy of Balance sheet of Shri Suresh Taparia as on 31/3/1999. xi. Copy of by Smt. Srikanta Devi Taparia dt. 4/11/2011 xii. Copy of statement of Account submitted by Smt. Srikanta Devi Taparia xiii. Copy of letter dt.8/7/1999 submitted by Smt.Srikanta Devi Taparia xiv. Copy of Balance .....

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xpenses etc. were not produced and, therefore, the impugned credits could not be considered as explained within the meaning of section 68 of the Act. 7. We have carefully considered the rival submissions. In the present case, the controversy revolves around the provisions of section 68 of the Act, which has been invoked by the Assessing Officer to treat a sum of ₹ 55,71,480/- as an unexplained cash credit. Section 68 of the Act, prescribes that where any sum is found credited in the books .....

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upon the assessee under section 68 of the Act can be discharged if an assessee is able to identify the creditor, establish the creditworthiness of the creditor and the genuineness of the transaction. In the instant case, assessee company had rented its premises to Shri. Suresh Chandra Taparia and Smt. Srikanta Devi Taparia. During the year under consideration, the Assessing Officer noticed an increase in the amounts credited to the accounts of the sundry creditors by a sum of ₹ 55,71,480/- .....

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said amount incurred by the aforesaid two creditors by debiting it to the building account and crediting the same to the accounts of the two creditors, Shri. Suresh Chandra Taparia and Smt. Srikanta Devi Taparia. In support, assessee furnished a copy of the communication of the two creditors, copies of which have been placed in the Paper Book at pages 41 - 42 and 55-56. In terms of such communication, the two creditors have explained to the Assessing Officer the details of expenditure incurred o .....

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Assessing Officer. Be that as it may, the material on record also suggests that in the impugned proceedings when the Assessing Officer issued notices under section 133(6) of the Act, the two creditors duly confirmed the genuineness of the transactions. 7.1 The stand of the Revenue is that the creditors could not furnish copies of their respective bank statements, which reflected payments made by them towards the renovation expenses of the tenanted property. The aforesaid objection has been the b .....

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before him was wrong or otherwise not credible. The explanations furnished by the assessee, as also by the two creditors have been merely disbelieved and it is not a case where any of the evidence has been found to be false or untrue. Factually speaking, in the present case, the assessee company has completely discharged the initial burden cast on it to explain the nature and source of the credits. The arrangement between assessee and its tenants by way of the tenancy agreement, copy of which ha .....

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