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2012 (10) TMI 1254 - AT - Income TaxUnexplained Cash Credits u/s 68 - Genuineness of sales along with the identity of the buyers was argued to be in dispute. Onus to prove was casted upon the assessee to explain the credits in the books which was duly discharged by him by presenting all details along with regular books of accounts, sale invoices, vouchers, receipt books etc. Still addition was made by AO u/s 68 on the ground that books of purchasers didn't contain any entry regarding such transactions. HELD THAT - CIT(A) has rightly come to the conclusion that the addition made by the Assessing Officer u/s 68 of the Act by considering the sale proceeds as cash credits cannot be sustained. AO has not doubted the genuineness of the purchases and when the stocks tally has been accepted by the AO then there is no reason to doubt the sales. Also, if the purchasing dealers did not account for the transaction in their books, the assessee cannot be penalised. The decision in the case of LAKHMICHAND BAIJNATH VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL 1958 (11) TMI 3 - SUPREME COURT was referred where it was held that amount credited in business books can normally be presumed as business receipts. The expression books with respect to s.68 is concerned, the Hon ble Punjab Haryana High Court in the case of SMT. SHANTA DEVI VERSUS COMMISSIONER OF INCOME-TAX 1987 (10) TMI 26 - PUNJAB AND HARYANA HIGH COURT , held that such books denotes books of assessee himself and not of other parties. Addition made by the AO u/s 68 of the Act by considering the sale proceeds as cash credits cannot be sustained. Decision in favour of Assessee.
Issues Involved:
1. Deletion of addition made under Section 68 of the Income Tax Act. 2. Violation of Rule 46A of the Income Tax Rules. 3. Genuineness of sales and identity of buyers. 4. Double taxation of the same income. Detailed Analysis: 1. Deletion of Addition Made Under Section 68 of the Income Tax Act: The primary issue raised by the Revenue was the deletion of the addition of Rs. 6,47,03,548/- made under Section 68 of the Income Tax Act. The Assessing Officer (AO) had treated the sales to M/s A.K. Impex, Delhi, and three other parties as unexplained credits, arguing that the identity of these buyers was not established. The AO's conclusion was based on the fact that these parties were not traceable at the given addresses, and some had invalid TAN numbers. The learned CIT(A) deleted this addition, emphasizing that the assessee maintained regular books of accounts, supported by purchase/sale invoices, stock register, and audit report. The CIT(A) also noted that the sales were against advance payments received through cash, demand draft, or RTGS, and the amounts were duly recorded in the books of accounts. 2. Violation of Rule 46A of the Income Tax Rules: The Revenue contended that the CIT(A) erred in admitting additional evidence in violation of Rule 46A of the Income Tax Rules. However, the CIT(A) clarified that the evidence submitted during the appellate proceedings was not new but supporting documents that were already part of the record or produced during the assessment. The CIT(A) had forwarded these documents to the AO for comments, and the AO's remand report was duly considered. 3. Genuineness of Sales and Identity of Buyers: The AO doubted the genuineness of sales to M/s A.K. Impex, Delhi, and three other parties because they were not traceable at the given addresses, and their TIN numbers were invalid. The CIT(A) found that the assessee had provided sufficient evidence to prove the genuineness of the sales, including copies of accounts, sales invoices, cash receipts, bank slips, stock register, and confirmations from brokers and transporters. The CIT(A) noted that the assessee maintained quantitative stock records, and the sales were properly accounted for. The CIT(A) also highlighted that the AO had not doubted the genuineness of the purchases, and the stock tally was accepted by the AO. 4. Double Taxation of the Same Income: The assessee argued that the addition made under Section 68 resulted in double taxation of the same income. The CIT(A) agreed, noting that the sale proceeds were already credited to the profit and loss account, and taxing the same amount again under Section 68 was unjustified. The CIT(A) relied on various judicial pronouncements, including the Hon'ble Supreme Court's decision in the case of CIT vs. Devi Prasad Vishwanath Prasad (1969) 72 ITR 194 (SC), which held that if the cash credit represents income already taxed, it cannot be taxed again. Conclusion: The CIT(A) thoroughly examined the evidence and found that the addition made under Section 68 was not justified. The assessee had provided sufficient proof of the genuineness of the sales and the identity of the buyers. The CIT(A) also addressed the issue of double taxation and ruled that taxing the same income twice was not permissible. The Tribunal affirmed the CIT(A)'s order, dismissing the Revenue's appeal.
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