'A' has shown sales and received the amount through banking channel in the same year and has disclosed the said transactions in the books of accounts. Lateron the purchaser has accepted before the department that he is engaged in the business of cheque discount and also issue cheques to other party if require.
LAO assessed the receipt of said amount u/s 68 of the Act.
Debate on Section 68: Can LAO Add Unexplained Cash Credits Amid Bogus Sales Claims in Diamond Trading? A discussion on a forum addresses whether the Local Assessing Officer (LAO) can add an amount under Section 68 of the Income Tax Act, concerning unexplained cash credits, when 'A' has declared sales and received payments through banking channels. The purchaser admitted to cheque discounting, raising suspicions of bogus sales. Participants debate whether the situation involves income tax or GST issues, with some suggesting that the transactions might be fraudulent, involving bill trading without actual goods movement. 'A' has declared sales in GST returns, but the legitimacy of the transactions is questioned due to the nature of the diamond trading business. (AI Summary)
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