| |
| The Tax Publishers2020 TaxPub(DT) 2416 (Ctk-Trib) INCOME TAX ACT, 1961
Section 68
If AO had any doubt regarding identity, creditworthiness and genuineness as regards amount stated to have been received from employees, he could have at least issued any notice either under section 131 or under section 133(6) to any of the employees but merely stating that assessee could not produce identity cards of 21 employees and they were not having PAN and not filing their income-tax returns, could not be accepted. Nominal amount collected from each employees was treated as a security money and it was to be paid back when employees left the service and hence, there was no violation of section 68 and addition made on account of unexplained cash credit was deleted.
|
Income from undisclosed sources - Addition under section 68 - Receipt of security money from employees treated as unsecured loan -
Assessee received Rs. 10 lakhs from 61 employees. AO treated the same as unsecured loan and unexplained credit under section 68 on the ground that assessee could not produce identity cards of 21 employees and they were not having PAN and not filing their income-tax returns. Assessee's case was that it was security deposits taken from the employees.Held: If AO had any doubt regarding identity, creditworthiness and genuineness, he could have at least issued any notice either under section 131 or under section 133(6) to any of the employees but merely stating that assessee could not produce identity card of 21 employees and they were not having PAN and not filing their income-tax returns, could not be accepted. Nominal amount collected from each employees was treated as a security money and it was to be paid back when employees left the service and hence, there was no violation of section 68 and addition made on account of unexplained cash credit was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 36(1)(va) Section 2(24)(x)
 SUBSCRIBE FOR FULL CONTENT
|