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TMI Blog2008 (9) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors identities and creditworthiness have been established. In this case, this had been done, therefore, it was not open to the AO to make the addition after entering upon an examination of the source of the source - Consequently, we feel that no interference is called for on this conclusion in the impugned order passed by the Tribunal. Disallowance of deferred revenue expenditure - We note that this is a clear finding of fact and the Tribunal has accepted the findings returned by the CIT (A) and has permitted the deduction of expenses towards advertisement which were admittedly of a revenue nature. The assessee had deferred the revenue expenditure in the year preceding the previous year relevant to the assessment year in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of deferred revenue expenditure. The Tribunal confirmed the findings of the Commissioner Income-tax (Appeals) in respect of both the grounds and dismissed the revenue's appeal. With regard to ground No. 1, the Tribunal noted that the assessing officer had treated the sum of ₹ 23,00,000/- appearing in the books of the assessee in the name of M/s Mahamaya Finance Company and M/s Laxmi Finance and Traders as unexplained. The said concerns were proprietary concerns of one Mr Ram Phool. The Tribunal noted that the said Mr Ram Phool had been regularly assessed to income tax and copies of his returns for the relevant year were filed before the assessing officer by the assessee along with his confirmation. Mr Ram Phool ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urden and, therefore, there was no reason for the assessing officer to treat the said cash credit as unexplained merely because M/s Punjab Tractors was not traceable. More importantly, the Tribunal noted that the attempt sought to be made by the assessing officer to verify the whereabouts of the M/s Punjab Tractors was nothing but an attempt to examine the source of the source which was not permissible. Consequently, the Tribunal held that the addition of ₹ 23,00,000/- made by the assessing officer under section 68 of the Act to the total income of the assessee on account of alleged unexplained cash credit was not sustainable. We have heard the learned counsel for the appellant and have examined the findings returned by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant conducted the business by appointing franchisees for the showrooms meant for the sale of the footwear but due to some unforeseen circumstances, the agreements with the franchisees got revoked and there was no possibility to carry out or to continue with the franchise business in subsequent years. The Commissioner Income-tax (Appeals), therefore, noted that the assessee had rightly claimed the expenditure during the year in question as the business had been started during that year. It would be relevant to note that in the preceding year, an expenditure of a similar nature had been disallowed by the assessing officer on the ground that the business had not commenced. The finding of the Commissioner Income-tax (Appeals) is that the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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