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Issues involved: Whether the addition made by the Assessing Officer u/s. 68 of the Act is justified.
Facts: The assessee, engaged in business and plying of lorries, declared income from lorries as per s. 44AE of the Act. An amount introduced in the current account was explained as proceeds from lorry business. The Assessing Officer treated the difference as unexplained cash credit u/s. 68 of the Act, which was upheld by the Ld. CIT(A). Assessee's Argument: The assessee contended that depreciation funds were available, exceeding the shortfall amount. Depreciation being a non-cash expense, the addition should be deleted. Revenue's Argument: The revenue argued that due to lack of specific depreciation claim, the assessee's contention should not be accepted. Judgment: Referring to a similar case, the Tribunal highlighted the distinction between "income" and "cash earning." Following the precedent, the Tribunal found merit in the assessee's argument. As additional funds equivalent to the depreciation amount were available, the addition of Rs. 1,92,000 was deemed unwarranted. The order of Ld CIT(A) was set aside, directing the AO to delete the addition. Result: The appeal of the assessee was allowed, and the impugned addition of Rs. 1,92,000 was directed to be deleted.
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