Bogus Sales

[Alpa Shah]

'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.

AI Summary

Unexplained cash credits assessed against banked sales amid purchaser's cheque discounting admission; genuineness and GST credit implications questioned.
Taxpayer showed banked sales and paid GST; purchaser admitted cheque discounting. Assessing officer treated receipts as unexplained cash credits. Respondents dispute whether income-tax addition is appropriate versus GST remedies: examine genuineness of supply, evidence of movement, whether ITC was legitimately used, and possible characterization as bill trading requiring reversal of input tax credit and GST anti-evasion action.