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2023 (8) TMI 507 - AT - Income TaxAddition u/s 68 r.w.s 115BBE - unexplained cash credit made - HELD THAT - DR could not controvert the contentions of the assessee that the purchases have been accepted. The assessee s accounts are duly audited and book results have not been disturbed. Therefore, merely because the sales have been made in cash ought not to have been the basis for making the addition. Moreover, the business of the assessee was exempted in respect of pecuniary limit despite of deposit of demonetize currency. It is not the case where the AO found any discrepancy related to stocks. If the sales were matched with purchases, in our view, no addition was called for. Therefore, we direct the AO to delete the impugned addition - Decided in favour of assessee.
Issues Involved:
The issues involved in this case are: 1. Validity of assessment order u/s 143(3) of the Income Tax Act, 1961. 2. Addition u/s 68 r.w.s 115BBE for unexplained cash credit. 3. Allegation of double addition without rejecting books of accounts. 4. Compliance with principles of natural justice in passing assessment order. 5. Charge of interest u/s 234A, 234B, and 234C of the Act. Summary of the judgment: 1. The appellant challenged the assessment order u/s 143(3) of the Income Tax Act, 1961, which was confirmed by the Ld. CIT(A). The main issue was the addition of INR 15,08,401/- as unexplained cash deposits by the Assessing Officer. The appellant contended that the purchases were accepted and verified, with no discrepancies in the stocks. 2. The Ld.CIT(A) upheld the addition, stating that the appellant failed to explain the sale claimed to R Sai Transport Company and did not provide clear evidence to support the transactions. The AO was deemed justified in making the addition as unexplained cash credit u/s 68 of the Act. 3. The Tribunal found that the purchases were accepted, the accounts were audited, and no discrepancies were found in the stocks. As the sales were matched with purchases, the addition was deemed unwarranted. The AO was directed to delete the addition of INR 15,08,401/-. The grounds raised by the assessee were allowed. 4. The appeal of the assessee was allowed, and the order was pronounced on 07th August, 2023.
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