TaxTMI 
TaxTMI 
2018 (6) TMI 411
X X X X Extracts X X X X
X X X X Extracts X X X X
....consequent bouncing of the same. AO, however, was of the view that bank has credited the amount in the bank account and accordingly, they were to be considered as cash credits and since assessee has not proved the identity of the creditors, the amount of Rs. 29,50,000/- was added to the income of u/s. 68 of the Act. 2.1. In addition to that, AO noticed that an amount of Rs. 2,35,09,456/- was claimed under the head 'car hire charges'. When asked for the details, assessee furnished certain details such as name, address of the payee, PAN and amount paid. However, in respect of an amount of Rs. 38,26,873/-, assessee could give only names of 150 payees and since no other details are received, the amount was treated as 'unexplained investment' u/s. 69C of the Act. 2.2. Like-wise, an amount of Rs. 27,91,627/-, out of total amount of Rs. 2,35,09,456/- of hire charges were also disallowed out of the claim made in the P&L A/c again u/s. 69C of the Act, stating that assessee has failed to prove the genuineness of expenditure. 2.3. Another amount of Rs. 11,68,383/- was disallowed towards addition of car hire charges out of total amount of Rs. 2,35,09,456/- on the reason that assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the own vehicles of the appellant were insufficient. The appellant made the payments through cheques / cash and as contended by the appellant, it is difficult and not practical to maintain the address of the said vehicle owners. 6.4 Section 69C mainly deals with the unexplained expenditure incurred by an assessee against which no explanation with respect to the source is offered or such explanation offered is not satisfactory, then only the said expenditure can be added. In the instant case, the source of the expenditure was not doubted by the AO but only raised doubts about the genuineness of the expenditure and hence, the conditions of Section 69C are not applicable to the case of the appellant. Therefore, both by facts and in law, I am satisfied with the explanation of the appellant and hence, delete the addition of Rs. 38,26,873/-". iii. On the issue of addition of Rs. 27,91,627/-: "7.3 I have carefully considered the submissions of the appellant and find force in the contention and agree with the explanation of the appellant, who has filed all details along with TDS Certificates. The appellant paid the amount of Rs. 27,91,627 to the ten parties towa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inly deals with the unexplained expenditure incurred by an assessee against which no explanation with respect to the source is offered or such explanation offered is not satisfactory, then only the said expenditure can be added. In the instant case, the source of the expenditure was not doubted by the AO but only raised doubts about the genuineness of the expenditure and hence, the conditions of Section 69C are not applicable to the case of the appellant. Therefore, both by facts and in law, I am satisfied with the explanation of the appellant and the evidences filed and hence, delete the addition of Rs. 4,69,424 made in respect of Mr. Syed Kaleemuddin and Mr.Shaik Mohd Aqueel and sustain the balance addition of Rs. 6,98,959 as the appellant did not furnish TDS Certificates in respect of payments made to the four parties as mentioned above". 4. Against the above order, Revenue is aggrieved and raised the following grounds: "1. The CIT(A) erred both on facts and circumstance of the case in deleting the addition toward unexplained cash credit u/s. 68 of the I.T. Act, 1961. 2. The CIT(A) ought to have appreciated the action of the Assessing Officer in treating the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt are the funds of the bank which cannot be treated as 'unexplained' in any manner. Since the cheques have been bounced, there are corresponding debits also and as assessee is maintaining books of account under Mercantile System of Accounting, both the deposit of cheques and bouncing of the cheques are bound to be recorded in the books of account. Under what circumstances, AO considered that these amounts as unexplained credits u/s. 68 of the Act is not explainable. Ld.CIT(A) examined the issue and very clearly stated that this cannot be considered as unexplained cash credits u/s. 68. Inspite of that, both in the original grounds of appeal and revised grounds of appeal, this issue is contested. We are not sure whether the Senior Officers like CIT are applying their mind to the facts of the issue before preferring appeals. It reflects sorry state of affairs. This forum has time and again cautioning that at least while preferring second appeal to the ITAT, the Senior Officers should exercise caution and prefer appeals only on meritorious issues. There is no merit both on law and on facts for the ground raised by the Revenue. Same is dismissed. 6.1. Coming to other three issues al....