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| The Tax Publishers2020 TaxPub(DT) 3228 (Rkt-Trib) INCOME TAX ACT, 1961
Section 68
Once AO disbelieved activity of assessee, then he had to disturb the entire income offered by assessee in her return of income. For the income offered to tax from activity of embroidery business, AO had not made any negative remarks but for cash balance shown by assessee as on 31-3-2015, AO doubted genuineness of business activity of assessee which was not justified as AO could not give different treatment for part of transaction of assessee and, accordingly, closing cash balance shown at the end of financial year could not be subjected to addition under section 68.
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Income from undisclosed sources - Addition under section 68 - AO doubted activity of assessee and subjected closing cash balance to addition - Income offered from disputed activity not disturbed by AO
Assessee declared her income from activity of tailoring/embroidery which stood duly accepted by AO, however, AO disbelieved activity of assessee and subjected closing cash balance shown at the end of financial year to addition under section 68. Held: Section 68 can be invoked with respect to credit entries found in books of account, accordingly, closing cash balance shown at the end of financial year could not be subjected to addition under section 68. Once AO disbelieved activity of assessee, then he had to disturb the entire income offered by assessee in her return of income. For the income offered to tax from activity of embroidery business, AO had not made any negative remarks but for cash balance shown by assessee as on 31-3-2015, AO doubted genuineness of business activity of assessee which was not justified as AO could not give different treatment for part of transaction of assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, RAJKOT BENCH
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