2016 (11) TMI 1553

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... ground of appeal taken by the revenue is ground no. (i) which reads as under :- (i) On the facts and in the circumstances of the case, the CIT(A) erred in deleting the addition of Rs. 35.05 lakh made by the A.O. u/s 68 of the Act by holding that the cash deposits were out of sale proceeds which were reflecting in the sales account because no such explanation was offered before the A.O. during the course of scrutiny proceedings." 3. The brief facts of the case are that the assessee derives income from trading and consignment business of plastic granules and PP Woven fabrics. The assessee is carrying on business and raised additional share capital from sources amounting to Rs. 40 lacs which the assessee has received as share appl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the assessee were of Rs. 8511415/-. Out of the total sales, the assessee has cash sales of Rs. 449338/-. The entire cash deposit is either from sale proceeds or from the collection against the book debt. We find that as per section 68 of the Act sum should be credited in the books but the assessee has credited the sale proceeds in its books of accounts which has been accepted by the Assessing Officer. The Assessing Officer has nowhere found the defect in the books of accounts, therefore, when the assessee has credit sale proceeds in cash in the books of accounts and the same is deposited in bank, no addition can be made u/s 68 of the Act. We also get support from the judgment in the case of CIT vs. Bhaichand H. Gandhji; 141 ITR 67 and S....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) has deleted the addition of Rs. 12 lacs by observing as under :- "11. As a result while share application money ofRs.12 lakhs of three parties named above whose bank account were furnished by appellant are treated as genuine and such addition of Rs. 12 lakhs is deleted, the balance of share application money of Rs. 28 lakhs from rest of 7 parties is treated as unexplained and addition of such amount is confirmed u/s 68 of Income Tax Act. As a result this ground no. 3 of appeal is partly allowed." 8. We have considered the submissions of both the sides. Looking to the facts and circumstances of the case, we find that in case of three parties the learned CIT(A) was of the view that three parties, viz. M/s R.K. Skyline Constructi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t addition of Rs. 16,39,960/- u/s 68 of the Income Tax Act for the unsecured loan taken by appellant from M/s Shree Shyam Polymers. The Assessing Officer has added this amount because this depositor has shown meagre income in his return, no interest is provided and appellant has failed to prove identity and creditworthiness of this depositor. It is a fact that this depositor who is a director in appellant company has shown income of only Rs. 1,49,301/- in its return and capital is only Rs. 9,27,309/- and in these circumstances creditworthiness of depositor is not proved for giving a credit of Rs. 16,39,960/-. Besides this huge cash deposits were seen in bank account of M/s Shree Shyam Polyers in Citi Bank account no.0- 000449-547 before mak....