2023 (1) TMI 525

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....ear 2015-16 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'), vide order dated 15.12.2017. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO by making addition of non-existing liability as unexplained cash credit u/s.68 of the Act as well as u/s.41(1) of the Act as cessation of liability. For this, assessee has raised various grounds but relevant ground is Ground Nos.2, 3 & 4 as under:- 2. The learned Commissioner of Income Tax (Appeals)-2 erred in sustaining the addition made on account of non existing liability as unexplained credits when there was no such liability existing as per the books of accounts. 3. The learned Commissioner of Income Tax....

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....n amount is possible and hence, he added this amount of Rs.1,06,40,000/- received during the year as unexplained income u/s.68 of the Act. The AO also noted that this amount to due to M/s. Trimex could not be treated as no longer payable as the company is non-existent and also treated the same as cessation of liability u/s.41(1) of the Act. For this AO recorded his findings in para 9 & 10 as under:- "9. In the absence of any proof or evidence, that the said amount was really received from M/s. Trimex, also no return of income was filed by the company M/s.Trimex for the assessment year 14-15 to 16-17 to cross verify the genuineness of the above loan amount, which was given to the assessee, the company is not existing in the address ....

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....le Supreme Court in the case of CIT vs. T.V.Sundaram Iyengar & Sons Ltd., (SC) 222 ITR 344. Aggrieved, assessee came in appeal before Tribunal. 5. We have heard rival content ions and gone through facts and circumstances of the case. We noted that neither AO nor CIT(A) is sure whether this is a transaction of unexplained loan or credit or this is a cessation of liability to be added u/s.41(1) of the Act or it is a business receipt to be added u/s.28(iv) of the Act, as noted by CIT(A). The assessee contended and produced ledger account of Trimex Resources Pvt. Ltd., wherein it is found that total amount in the account of Shri V. Veerasekar, the assessee is Rs.2,02,80,000/-. Out of this, there is opening balance of Rs.96.40 lakhs which per....