2025 (2) TMI 488

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....by the NeFAC, u/s. 143(3) of the Income-tax Act (hereinafter referred to as the "Act"), dated 29.09.2023 for Assessment Year 2020-21. 2. Grounds taken by the Revenue are reproduced as under: I. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has earned in deleting the addition of Rs. 2,00,00,000/- made by the AO u/s. 68 of the Act without appreciating that the assessee has given contradictory replies during the course of assessment proceedings?" II. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 2,00,00,000/- made by the AO u/s. 68 of the Act without appreciating the fact that geniuses of the transaction ....

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....y the assessee, no supply took place nor the money was returned. Assessee had made a provision for doubtful advances in its books for the Financial Year 2016-17 relevant to Assessment Year 2017-18. While computing total taxable income, this provision was disallowed. Thus, assessee established its case that there is no liability/obligation payable to Santosh Trust. Rather, it is an amount paid by assessee in advance and recoverable from it. However, on these submissions, ld. Assessing Officer held that this liability is an incorrect entry in the books of accounts and is a bogus credit balance liable to be added back to the total income of the assessee as un-explained liability u/s. 68 of the Act. 4. Aggrieved, assessee went in appeal befo....

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....which is a current asset and not a liability. According to the ld. Counsel, this amount stood reflected in the books as a sundry debtor and thus ld. Assessing Officer was not correct in holding that assessee received a credit from Santosh Trust for the purpose of making an addition as unexplained liability u/s. 68 of the Act. 8. We have heard both the parties and perused the material on record. The factual position observed by ld. CIT(A) based on his verification has not been controverted by bringing any cogent material on record. Undoubtedly, it is case where the amount paid by the assessee is an asset in it books of account and not the one where it has received the amount and is a liability. Furthermore, it is claimed that assessee has....