The Tax Publishers2020 TaxPub(DT) 1925 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 68

AO incorrectly applied section 68 in respect of outstanding balance of sundry creditors because assessee clearly demonstrated outstanding balance in name of said parties been squared off in subsequent year by payment from account payee cheques which was not disputed by AO.

Income from undisclosed sources - Addition under section 68 for alleged bogus outstanding balance pertaining to sundry creditors - Outstanding balance in name of said parties been squared off in subsequent year -

Issue was as regards addition under section 68 for alleged bogus outstanding balance pertaining to sundry creditors. Held: AO incorrectly applied section 68 in respect of outstanding balance of sundry creditors. Assessee clearly demonstrated outstanding balance in name of said parties been squared off in subsequent year by payment from account payee cheques which was not disputed by AO. Therefore, appeal of assessee was allowed.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 271(1)(c)

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