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TMI Blog2021 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of the case. 2. The learned CIT(A) erred in confirming the action of the Assessing Officer in treating the amount of Rs. 3,36,15,553/- as unexplained cash credit under section 68 of the Act. 3. The appellant craves leave to add, delete, amend or otherwise modify one or more of the above grounds either before or at the time of hearing of this appeal. 3. The brief facts of the case are that the assessee is engaged in the business of operating fishing harbor at Muttom port located at Kanyakumari District, filed its return of income for the assessment year 2015-16 on 14.03.2017 declaring a loss of Rs. 29,56,388/-. The case was taken up for scrutiny and during the course of assessment proceedings, the AO called upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee at Muttom. The said loan has been treated as liability in the balance sheet with a corresponding debit to workin- progress account. Further, the assessee has obtained refinance loan of Rs. 3,70,00,000/- from M/s. Sundaram Finance Ltd., and the creditor while disbursing loan has adjusted outstanding loan pertains to earlier loan granted for development of project and balance amount of Rs. 1,85,00,000/- has been credited to the account of the assessee. But, the assessee by an inadvertent mistake has passed entries in the books of account and has accounted loan amount of Rs. 3,70,00,000/- with a corresponding debit to work-in-progress account and had also passed another entry for loan disbursement amount of Rs. 1,85,00,000/- and has de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still un-reconciled. Therefore, he opined that AO was right in making addition towards difference in liability shown in books of account u/s.68 of the Act. 6. The ld.AR for the assessee submitted that the ld.CIT(A) has erred in confirming the addition made by the AO towards nonexisting liability in the books of account in the name of M/s. Sundaram Finance Ltd., despite assessee has filed confirmation letter from M/s. Sundaram Finance Ltd., and has also filed loan disbursement and sanction letter as per which the creditors has clearly clarified the fact that while disbursing second loan of Rs. 3,70,00,000/- it has adjusted outstanding balance of earlier loan taken under the contract No.1021000205. The AR further submitted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the materials available on record and gone through the orders of the authorities below. The fact borne out from records indicates that the assessee is engaged in the business of operating shipping harbor at Muttom port. During financial year 2013-14, the assessee has availed loan of Rs. 2,70,00,000/- from M/s. Sundaram Finance Ltd. The assessee was following a method of accounting to record loan liability in its books of account as per which the loan amount has been credited in the books of account of the assessee with a corresponding debit for an equal amount to the work-in-progress account. The said loan was repaid on monthly EMI and the outstanding loan during the financial year 2014-15 stood at Rs. 1,62,86,000/- towards principal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ltd., we find that while disbursing new loan of Rs. 3,70,00,000/-, the creditor M/s. Sundaram Finance Ltd., has adjusted earlier loan outstanding at Rs. 1,90,00,000/- and the balance amount of Rs. 1,85,00,000/- has been disbursed and credited to bank account of the assessee on 27.10.2014. The assessee while recording second loan availed from M/s. Sundaram Finance Ltd., has once again passed wrong accounting entries and credited loan account for an amount of Rs. 3,70,00,000/- with corresponding debit to work-in-progress account. Thus the assessee has created non-existing liability of Rs. 1,85,00,000/- and has also continued earlier loan amount of Rs. 1,62,86,000/- towards principal outstanding and a sum of Rs. 28,35,721/- towards accrued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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