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TMI Blog2021 (7) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessing officer finds that the assessee has already accounted for the sales out of the sundry credits, the resultant addition cannot be made in the hence of the assessee u/s 68. Therefore to that extent the learned assessing officer is directed to delete the addition. With this direction to the assessee, all the grounds of the appeal are restored back to the file of the learned assessing officer to decide the issue afresh. - ITA No. 1617/Del/2020 - - - Dated:- 14-7-2021 - Shri Kul Bharat, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Dibya Prashant Singh, Adv, Shri Tarun Chanan, Adv For the Revenue : Shri Mahesh Thakur, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-3, New Delhi dated 18.01.2019 for Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal:- 1. Because the Commissioner Income Tax (Appeals) -03, New Delhi ['CIT (A)'] without any justification while exercising the purported authority under Section 250 of 1961 Act passed the order dated 10.08.2020 ('Impugned Order') confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obile with the amount, as requested, which facilitates the dealer/ distributor to pay activation amount to the ultimate customer. Distributors deposit money in the bank accounts of the Dish Infra Services Private Limited and fill details on the web portal mentioning the complete details of EPRS requirements and payments details. Post verification the EPRS recharge amount is transferred to distributors. The amount received against the recharge is duly taxed under the CGST Act, 2017 and applicable tax on the amount received is discharged. Thus, the onus is discharged by the Appellant and the explanation offered by the Appellant is acceptable. 5. Because the cash credits are not the loan advances but deposits towards recharge by small traders for purchasing of EPRS, therefore, there is no need to show the means or credit worthiness of the creditor. There is no legal requirement to show the source of the source by the appellant. This principal is traceable to Section 106 of Evidence Act and source of source is not within the knowledge of the appellant. In case revenue is not satisfied with the explanation offered it may choose to proceed against the creditors. 6. Because all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already been offered to tax and therefore the nature of such deposits was recharge income, which did not warrant any disallowance u/s 68 of the Act. 13. Because Ld. AO/CIT (A) has erred on facts that the penalty was levied by ignoring the basic submissions of the Appellant that advances was deposited by the distributors and not the Appellant and without asking for the third-party confirmation to be received is illegal and void. 14. The above grounds / sub-grounds are without prejudice to each other. 3. Brief facts of the case shows that the assessee company engaged in the business of infrastructure support services to its customers. It filed its return of income on 30.09.2016 declaring income of ₹ 77,42,61,381/-. During the course of assessment proceedings the ld AO found that the assessee has claimed deposit of ₹ 705.50 crores. The ld AO asked assessee to justify the above deposit in view of the provision of section 68 of the Act. The assessee submitted details of advances and deposits along with PAN and addresses of all the parties except in case of small customers. The ld AO noted that the assessee could not given the PAN of advances received from smal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so stated that the disallowance u/s 68 of the Act could not have been made in the hands of the assessee as these are trading transactions. He further stated that the sale amount represents pertaining to 18 to 20 depositors out of 4000 depositors. The learned authorised representative further submitted that the above credits have resulted into sales in subsequent period. He further submitted that the most of the accounts are pertaining to the various installations of various companies which naturally could not have permanent account number. Therefore, he submitted that the ld CIT(A) has confirmed the additions u/s 68 of the Act without any basis. 6. The ld DR referred to the order of the ld CIT(A) and submitted that the ld CIT(A) has noted that in all these cases the deposits are more than ₹ 50000/- and even the address of these parties are not available. He further submitted that the assessee even could not produce the ledger accounts of these depositors and therefore, the assessee has failed to show the identity, creditworthiness and genuineness of the transactions. He therefore, defended the orders of the lower authorities. 7. We have carefully considered the rival co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the parties are the respective guesthouses of various companies or other organisations. Therefore, it is apparent that these parties are the trade creditors of the assessee. However the assessee has failed to produce even the Ledger account of these parties before the learned CIT A. If these are the trade creditors claimed by the assessee that in subsequent years the sales should have been accounted for in these accounts. If, the sales has been accounted for out of these sundry credits, then the addition u/s 68 of the act would result in to double addition. It is also but natural that assessee has provided services to the guesthouses of various companies as well as of Indian Navy which naturally could not have the permanent account number. Therefore, in the interest of justice we set-aside the whole issue back to the file of the learned assessing officer with a direction to the assessee to show by producing the Ledger account of the sundry creditors that in subsequent years the sales have been accounted for against the credits received from these parties. If, learned assessing officer finds that the assessee has already accounted for the sales out of the sundry credits, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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