The Tax Publishers2021 TaxPub(DT) 0323 (All-Trib)

INCOME TAX ACT, 1961

Section 68

When the amount was claimed to have been received by assessee through banking channel and under the agreement, which was claimed to be repaid by the assessee in subsequent year, then the relevant documentary evidence was required to be verified before deciding the issue of unexplained cash credit, therefore, matter was remanded back to AO to properly verify, examine and consider the evidence produced by the assessee.

Income from undisclosed sources - Addition under section 68 - Assessee showed earnest money with an opening balance as brought forward from the preceding year -

Assessee was engaged in the business of Civil Contract. During the course of assessment proceedings, AO noted that in the balance sheet the assessee had shown the earnest money of Rs. 3,79,00,000, which was Rs. 1,22,00,000 as on 31-3-2009. AO asked the assessee to explain as to why the earnest money should not be considered as unexplained cash credit, for the year under consideration and added to the income of assessee under section 68. AO noted that assessee has offered no explanation about the nature and source thereof and accordingly, made addition under section 68 as unproved cash credit. Held: AO made the addition for want of any explanation however, assessee had referred to various documents filed before AO, which was also stated in the affidavit filed by assessee. AO even during the remand proceedings has not considered the alleged details and record produced by assessee. When the amount was claimed to have been received by assessee through banking channel and under the agreement, which was claimed to be repaid by the assessee in subsequent year, then relevant documentary evidence was required to be verified before deciding the issue of unexplained cash credit. Hence, matter was remanded back to AO to properly verify, examine and consider the evidence produced by the assessee.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2010-11


INCOME TAX ACT, 1961

Section 143(3)

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