9911796707
TMI Blog2016 (8) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts into these 5 creditors’ accounts by passing necessary journal entries. We further noticed that there is no fresh credit accepted during the current financial year. All the credits are transferred from the previous financial year. Therefore, we are of the view that the A.O. was not correct in making additions towards brought forward credits during the financial year 2009-10. The CIT(A) after considering the relevant details deleted the additions made by the A.O. We do not see any error or infirmity in the order passed by the CIT(A). - Decided against revenue - I.T.A.No.594/Vizag/2014, C.O. No.11/Vizag/2015 - - - Dated:- 17-6-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the above loan creditors, the A.O. issued summons u/s 131 of the Act and recorded statement from the above said 9 creditors. Out of the 9 loan creditors, 4 creditors have been accepted by the A.O., stating that the creditors have discharged their burden cast upon by filing the necessary proof. However, in respect of remaining 5 creditors, the A.O. observed that in the statement recorded, the creditors have stated that they have advanced loan to the firm and the sources for the said loan was borrowed from their friends. The A.O. further observed that from the books of accounts of the assessee and confirmation letter filed by the parties, the amounts held in the name of some persons in the previous financial year have been transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the financial year 2009-10. The assessee has re-grouped the individual loans accounts into these 5 person s accounts by passing journal entries in the books of accounts during the financial year 2009-10 without any fresh credits. As the impugned loan borrowings have taken place in the year 2008-09 and there was no fresh borrowings in the subject assessment year and also the transfer of credits are confirmed by the creditors in their income tax returns, there is no basis to make the additions for the subject assessment year. With these observations directed the A.O. to delete the impugned additions made u/s 68 of the Act. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 4. The Ld. D.R. submitted that the CIT(A) erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans given to partnership firms. The A.R. further argued that the assessing officer failed to appreciate the fact that none of the credits are received during the relevant financial years. All the credits are received during the financial year 2008-09 and during the financial year the firm has re-grouped the individual loans into 5 persons accounts because of administrative convenience. The A.O. was not correct in invoking the provisions of sec. 68 to the credits found in the books of accounts which are brought forwarded from previous financial year. 6. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. made additions u/s 68 of the Act towards unsecu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee of that previous year. A plain reading of section 68 of the Act makes it clear that any sum found credited in the books of accounts of the assessee, assessee offers no explanations about nature and source of the credits, then the sums found credited in the books of accounts is taxable during that financial year. In the present case on hand, on perusal of the facts available on record, we noticed that the assessee has accepted loans from various individuals during the previous financial year 2008-09. During the financial year 2009-10 the assessee has re-grouped the various loan accounts into these 5 creditors accounts by passing necessary journal entries. We further noticed that there is no fresh credit accepted during th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
