2014 (7) TMI 46

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....ation of this Court:- "i) Whether the Tribunal has acted within its jurisdiction in holding that the amount aggregating to Rs. 1,03,648/- was assessable as business income of the assessee for the assessment year 1993-94 that too by making out a new case in favour of the Department/revenue? ii) Whether the amount of Rs. 1,03,648/- representing the advance money found credited in the books of accounts of the assessee was liable to be taxed as 'income from business' under the Income Tax Act, 1961 during the assessment year 1993-94 even when the provisions of section 41(1) or section 68 were not attracted to the case of the assessee-appellant? iii) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in....

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.... Section 143(3) of the Act was made on 14.3.1996 at an income for Rs. 4,49,490/-. Against the assessment order, the assessee went in appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] who dismissed the same. The assessee filed further appeal before the Tribunal and vide order dated 19.8.2002, the Tribunal set aside the issue regarding liabilities claimed towards M/s Aman Sales Pvt. Limited (Rs. 60,000/-), M/s ASK Steel (Rs. 13,650/-), M/s Technological Corporation (Rs. 29,998/-) and M/s Guest Keen Williams Limited (Rs. 13,731/-) and remitted the same to the file of the Assessing Officer to decide as per law. In compliance to the directions of the Tribunal, notices under Sections 143(2) and 142(1) of the Act were issued requirin....

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....at neither the provisions of Section 68 of the Act were attracted nor provisions of section 41(1) of the Act were applicable. It was urged that it was under bonafide belief that three entries in the books of account of the assessee amounting to Rs. 1,03,648/- which had been treated to be income by the Assessing Officer were not income of the assessee. It was also argued that the judgment of the Apex Court in T.V. Sundaram Iyengar and Sons Limited, (1996) 222 ITR 344 was not applicable and was distinguishable as in that case, the assessee had carried the amount to the profit and loss account and in such a situation, the amount was treated to be income of the assessee. 4. On the other hand, learned counsel for the respondent-revenue supporte....

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....ted and M/s Technological Corporation were also received in the earlier years. All these credits are raised for the trading activity carried by the appellant. In other words, the moneys had arisen out of ordinary trading transactions. After the creditors denied of any claim over these moneys and in the case of the third party, the credit being non genuine, it can be held that these moneys did not remain money of its customers and suppliers respectively since the liability to pay back ceased to exist. These amounts thereafter had become moneys of the appellant and character of receipts too changed to the income of the appellant, even though the same could not be brought to tax by application of section 68 of the Act. The settled principle is....