Case Law Details
ITO Vs Ashok Transport Co. (ITAT Jodhpur)
There is a difference between credit representing a liability payable by the assessee and a credit representing monies received from another person. It is because of this distinction a liability which arises as a consequence of any purchase resulting in a corresponding credit to the account of the supplier cannot be added u/s. 68 of the Act, taxguru.in more so, when the purchase has been accepted as genuine. In other cases involving actual receipt of money, the provisions of sec. 68 are applicable and then the onus is on the assessee to prove satisfactorily the nature and source of the monies. In the present case we note that the transaction between the assessee and the truck owners is a liability which assessee had to pay arising from the trade transaction of Rs.78,22,863/- which is reflected under the head ‘other payable’ has arisen as a consequence of the aforesaid trade transaction and the sum of Rs.78,22,863/- represented the liability to pay the truck owners by the assessee once he receives from the principal. We note the entire turnover on transportation of Rs.11,70,63,030/- has been accepted by the AO as genuine, so question of addition of the sum of Rs.78,22,863/- which represented the liability to pay the truck owners by assessee cannot be added u/s. 68 of the Act. Therefore, we do not find any infirmity in the order of the CIT(A) and we agree that section 68 of the Act was wrongly invoked in the present case in respect of the outstanding liability payable by the assessee to the truck owners.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal preferred by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-1, Jodhpur dated 18.04.2018 for AY 2014-15.
2. The first ground of appeal of the revenue is as under:
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