TaxTMI 
TaxTMI 
2013 (11) TMI 814
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....n admitting 'Nil' income and the return was accepted under the provisions of section 143(1) of the Act. Later, in the course of survey in other group cases, it was found that Assessee advanced an amount of Rs. 3,13,15,185/- as unsecured loan to M/s Rayalaseema Steel Re-Rolling Mills. In the proceedings of the said firm, creditworthiness of Assessee firm was enquired. Assessee's statement of account with Punjab National bank account was filed and consequently information was passed on to the present AO about investments made. On receipt of information, proceedings u/s 148 were initiated to bring the deposits made in the bank account to tax as income of Assessee firm. Assessee explained, as extracted in page 2 of the assessment order, that th....
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....question of invoking section 68 does not arise. It relied on various case law. However, the learned CIT(A) applied the principles applicable to the cash credits and ultimately held that all the three ingredients for proving cash credits, i.e., identity of the person, creditworthiness and genuineness of the transaction remained unproved. Accordingly, he confirmed the order of the AO. 4. Before us, the learned counsel placed paper book and details of sales and sundry debtors available in various earlier years and also schedules of balance sheet for this year including paper book furnished before the CIT(A) to submit that Assessee was having sundry debtors in the books regularly and, therefore, receipt of money from sundry debtors cannot be....
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....posited in the bank account as cash credits. It is Assessee's submission that there are outstanding debtors in the books from whom Assessee has to collected monies since Assessee was out of business during the year and all these outstanding debtors have been collected in cash and, therefore, these are not cash credits, but, are trade receipts in the form of cash. In support, Assessee has submitted balance sheet, figures in various earlier years in which there are sundry debtors and corresponding sales, which are as under: ( amounts in Rs) S. No. Issue Assessment Year 2006-07 2005-06 2004-05 2003-04 2002-03 1 Sundry Debtors 0 26865713 26670832 37970215 33213302 2 Sales....
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....not trade receipts. The coordinate bench of ITAT in the case of ITO Vas. Rajendra Kumar Taparia, 106 TTJ 712 (Jodh.) has held that "cash credits standing in the names trade creditors, all income-tax Assessees, could not be treated as non- genuine when they have confirmed the transactions by filing affidavits and deposing before the AO, and the addition could not be made in respect of cash credits or interest paid thereon". In the present case, the amounts received by Assessee are not cash credits but the same were recovery of the debtors, which are available in the books of account. Since Assessee furnished details of debtors and also the entries made in the books of account, we are of the opinion that both the AO and the CIT(A) have erred ....