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TMI Blog2014 (12) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was that cash has been withdrawn by Shri Raju Joseph from the account of Shri Biju Joseph and given to Shri Vijayakumar, now partner of the firm. The loan has been credited in the cash book in the respective days. The Canara Bank NRI account copy of Shri Biju Joseph for the period 01/04/2006 to 17/11/2009 was filed alongwith the confirmation letter. There were withdrawals on the following dates. Date in bank a/c Description Cheque No. Amount 22/12/2007 Self 940425UPLO 2,00,000/- 08/01/2008 Biju Joseph 940427UPLO 7,50,000 29/01/2008 Biju Joseph 940428UPLO 3,75,00/- 13,25,000/- The amounts has been credited in cash in the assessee's account in the head outside loan from Biju Joseph. The assessee has received Rs. 1,20,000/- as outside loan in cash on 15/12/2007 but this amount was not seen withdrawn from the bank account and the assessee has not produced any evidence or explanation for this amount. Therefore Rs. 1,20,000/- was treated as unexplained cash credit and addition was made u/s. 69 of the I.T. Act. 4. Before the CIT(A), the assessee submitted that Rs. 1,20,000/- has been added back as unexplained cash credits stated to have been received from Shri Biju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 14,20,781/- in the revised return. The Assessing officer observed that once certain amount has been classified as liability under the head 'Sundry Creditors', the same is an outstanding liability which is supposed to be paid to the trade creditors. However, it was noticed by the Assessing officer that by revising the return, the assessee has swapped the sundry creditors with the credit to the partners capital as well as to the current account. It has been observed by the Assessing officer that in the revised return of income, the assessee has brought in addition to capital of Rs. 12,00,000/- and addition to current account of partners, Rs. 19,41,379/-. The outstanding amounts in the sundry creditors as on 31-03-2008 was Rs. 50,68,767/- not claimed in the sundry creditors and advance and deposits from partners and relatives in the revised return was (5,52,231 + 379096) = Rs. 9,31,327/-). The source for the credit in the capital was explained by the assessee as the transfer of outstanding credit to partner's capital account. Credit for Rs. 9,31,327/- is given to the assessee on this ground. The balance figure (Rs.12,00,000 +Rs.19,41,379-Rs.9,31,327) Rs. 22,10,052/- was treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has failed to file such confirmation or evidences supporting their claims even during the course of appeal. The CIT(A) observed that no contrary view can be taken to that of the Assessing office's as there are no new facts to form a different opinion and mere logic and argument could not suffice to satisfy the answer to the question of fact. In view of this, the CIT(A) held that the Assessing officer has rightly considered the amount of Rs. 22,10,052/- as unexplained cash credits, and added to the total income u/s. 68 of the I.T. Act. Against this, the assessee is in appeal before us. 11. The Ld. AR reiterated the submissions made before the CIT(A). According to the Ld. AR, the sundry creditors have transferred the capital to the partners account only to boost up the capital and the lenders have not waived the liability and this is only unilateral transaction which does not warrant any addition. Moreover, the section 68 cannot be applied to the sundry credits which does not come into existence in the assessment year under consideration and it is only carry forward balances. 12. On the other hand, the Ld. DR relied on the order of the lower authorities. 13. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation is 'include' and not 'means', so that it is not to be read in a restrictive manner. The tribunal explained the scope of the said Explanation in the case of Kalyani Maan Singh vs. ITO (in ITA No. 6500/Mum(A)/2011 dated 14.11.2013) to mean that the assessee, even as accounts are not sacrosanct, cannot assume a stand contrary to his own accounts. Explanation 1, accordingly, could not be interpreted to conclude that there is or could be no remission or cessation of liability unless the same is written off in accounts. The argument that there was no period of limitation in respect of a liability being disputed under the Industrial Disputes Act was also repelled by the hon'ble court in Chipsoft Technology (P.) Ltd. (supra) on the basis of the decision by the apex court in The Nedungadi Bank Ltd. vs. K. P. Madhavankutty Air 2000 SC 839, holding that a stale dispute ousts itself from being entertained and adjudicated. As would be seen, the hon'ble court has sought to read the provision consistent with the facts of the case, and not on the basis of a theoretical construct alone, divorced from the facts of the case. Reference was made both by the hon'ble court as well as the tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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