TaxTMI 
TaxTMI 
2026 (2) TMI 1186
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.... referred as "Act") relevant to assessment year 2017-18. 2. The assessee has raised the following grounds of appeal: 1. That the Ld. AO /CIT(A) erred on facts and in law in assessing the income of the appellant at INR 2,48,58,016 as against the returned income of nil declared by the applicant. 2. That the final assessment order has been passed by the AO in haste, without any application of mind and without following the due procedure of law. 3. That the CIT(A) has erred in facts and in law in dismissing the additional evidence filed by the applicant. 4. That the AO/CIT(A) erred on facts and in law in considering the revenue from rendition of marketing support and back office support services received b....
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....t of Rs. 49,605/- as unexplained and making addition u/s. 69C of the Act. 7. That the AO has erred on facts and in law by imposing interest of Rs. 63,43,788/- u/s. 234B of the Act. 8. That the AO erred on facts and in law in initiating penalty proceedings under section 274 read with section 271AAC of the Act. 3. Brief facts of the case are that the assessee company was incorporated in India on 10.10.2005 and has been set up for exploration and mining activities in India. The assessee was involved in exploration activities but was not able to commence any commercial mining activity till December, 2013. In January 2014, it became a coal marketing support office of its group company and has exited its exploration business ....
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....the aforesaid additions, assessee appealed before the Ld. CIT(A), who vide his order dated 11.5.2025 has not allowed the appeal of the assessee by holding that addition u/s. 68 for revenue from services was upheld by reiterating AO's findings and the additional evidence was dismissed because no justification was given for not submitting these documents before the AO; addition u/s. 69 for unexplained liability was upheld since BSR's ledger showed the bill was paid and nothing was payable to BSR and addition u/s, 69C for unexplained expenditure was upheld based on the information obtained form BGL under section 133(6). Aggrieved, assessee is in appeal before the tribunal. 5. At the time of hearing, Ld. AR has submitted that lower authoriti....
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....d making addition under section 68 of the Act and also erred in treating the amount of Rs. 49,605/- as unexplained and making addition u/s. 69C of the Act. 6. Ld. DR relied upon the orders of the authorities below. 7. We have heard the rival contentions and perused the records. As regards addition of unexplained cash credit u/s. 68 of the Act amounting to Rs. 2,35,57,411/- is concerned, we find that Section 68 is not applicable since there is no element of loan or borrowing in the revenue earned from rendition of services. It is settled law that Section 68 is applicable only where there is 'cash credit' from a 'creditor' or 'investor' etc., and not on revenue receipts of an assessee, hence, it does not apply the present case wherein a....
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....o auditing expense and not any cash credits per se. Accordingly, the AO is wrong in making addition on account of trade payables instead of cash credits u/s. 68 as bogus and unexplained, completely disregarding the explicit language of section 68, which applies to unexplained cash credit and not to such future liability. It is also noted that AO has not proposed this addition in show cause notice dated 19.12.2019. In view of above, the addition made u/s. 68 on this account deserve to be deleted. We hold and direct accordingly. 7.2. As regards addition of Rs. 49,605/- u/s. 69C of the Act is concerned, we find that Section 69C is applicable in cases where assessee has incurred any expenditure but is unable to explain the source of such exp....