TaxTMI 
TaxTMI 
2016 (10) TMI 243
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.... payable to Shri S.S. Dhage Rs. 1,89,000/- and Shri B.M. Gaikwad Rs. 95,300/- and in upholding the validity of proceeding u/s. 147/148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The assessee by way of additional ground of appeal has assailed the impugned order in not holding the reassessment proceedings u/s. 147/148 of the Act as bad in law, since, no separate order was passed in deciding the objections filed by the assessee. 2. The brief facts of the case as emanating from records are: The assessee is a civil contractor. The assessee filed his return of income for the assessment year 2003-04 on 28-11-2003 declaring total income of Rs. 4,96,790/- and agricultural income of Rs. 16,995/-. The copy of Trading, Profi....
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....ity of reopening u/s. 147/148 of the Act. The ld. AR of the assessee subsequently filed letter stating that on instructions from the assessee the additional ground and ground No. 6 challenging the validity of proceedings u/s. 147/148 of the Act are withdrawn. In respect of ground Nos. 1 to 5 which deal with the single issue of confirming addition on account of outstanding expenses/unproved creditors payable to Shri S.S. Dhage Rs. 1,89,000/- and Shri B.M. Gaikwad Rs. 95,300/-, the ld. AR contended that no addition can be made u/s. 68 of the Act. The ld. AR submitted that the assessee has utilized the services of Shri S.S. Dhage and Shri B.M. Gaikwad and had not paid for the services utilized. It was in this context the assessee has shown the....
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.... addition which has been impugned by the assessee is in respect of unproved/unexplained creditors Shri S.S. Dhage Rs. 1,89,000/- and Shri B.M. Gaikwad Rs. 95,300/-. In first appeal, the Commissioner of Income Tax (Appeals) has categorically observed that the addition in respect of unproved creditors has been made u/s. 68 of the Act. The contention of the assessee is that the addition made in respect of unproved creditors cannot be made under the provisions of section 68 as the assessee had not accepted any advances/loans or any amount from the aforesaid persons. In fact, the assessee was to pay to Shri S.S. Dhage and Shri B.M. Gaikwad for the services rendered by them. 6. Before proceeding further it would be relevant to first refer to t....
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....revious year and the assessee either offers no explanation or the explanation offered by the assessee about the nature and source of such credit, in the opinion of Assessing Officer, is not satisfactory. It is only in such circumstances the sum so credited may be charged to Income Tax as the income of assessee. In other words, for making addition u/s. 68 of the Act, the assessee should have received cash. 7. In the present case the stand of the assessee is that Shri S.S. Dhage and Shri B.M. Gaikwad are shown as creditors as they had rendered services and the assessee was to make payment to the aforesaid persons for the services rendered. A perusal of the assessment order shows that the Assessing Officer has made addition without quoti....