TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 923
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....magnesium sulphate heptahydrate. The assessee filed its return of income for the assessment year 2009-10 on September 25, 2009 declaring "nil" taxable income after claiming exemption under section 10B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The case of the assessee was selected for scrutiny and notices under section 143(2) were issued to the assessee on September 3, 2010 and May 23, 2011. During the course of assessment proceedings, the Assessing Officer observed that during the period relevant to the assessment year under consideration, the assessee has received Rs. 5 lakhs each from Shri Iyyappan and Shri M. Ramamoorthy in cash and has repaid the amount in same manner. The assessee was asked to furnish the deta....
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.... 10B of the Act. The addition made by the Assessing Officer on account of unproved creditors is business income of the assessee and thus, the assessee is eligible to claim exemption on the same. On the merits, learned counsel contended that the assessee had produced both creditors before the Assessing Officer. Both persons filed affidavits admitting that they have given Rs. 5 lakhs each to the assessee. In the affidavit they have further stated that they have received back the amount advanced to the assessee. The assessee has been able to establish the identity of the creditors, therefore, the authorities below have erred in making addition under section 68 of the Act. 4. On the other hand, Shri C. V. Pavana Kumar, appearing on behalf of t....
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....d counsel for the assessee that the assessee is eligible for exemption under section 10B on the additions made under section 68. Accordingly, this contention of the assessee is rejected. 6. The second submission made by learned counsel for the assessee is on the merits of the issue. The assessee has produced both alleged creditors before the Assessing Officer. Both persons have filed affidavits admitting that they have advanced Rs. 5 lakhs in cash in various instalments less than Rs. 20,000 each to the assessee. Except for the admission in the form of affidavit, there is no document on record whatsoever to show the genuineness of the transactions. Moreover, the manner in which cash amounts have been accepted by the assessee from both the a....