INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - AO doubted transactions showing cash credit in books of assessee - Assessee pleaded the amount to have been received against sales--Rejection on the ground of failure to furnish details of existence of parties-No dispute as regards corresponding sales

AO alleged that there were certain transactions showing cash credit in the books of assessee which were not explained and ,therefore, he invoked section 68 and made addition .Assessee's case was that amount represented cash received against sales and sale was offered to tax by reflecting the same in trading and profit and loss account. AO rejected this on the ground that assessee failed to furnish details of existence of parties. Held: Section 68 can be attracted where there is a credit found in books of account and assessee failed to offer any explanation or the explanation was not satisfactory.In the instant case assessee explained that impugned amount represented sale which had not been doubted by AO.Also sales receipt had already been shown in books of account as income.Further, there was no iota of evidence having any adverse remark on purchase shown by assessee in the books. Once purchases had been accepted, then corresponding sales could not be disturbed without giving any conclusive evidence/finding merely on the ground that assessee failed to furnish the details of the existence of the parties.Accordingly, addition could not be sustained.

REFERRED :

FAVOUR : in assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 143(3)

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