Case Law Details
Brief of the Case
In the case of M/s. Jindal (India) Textiles Vs. ITO the Hon’ble ITAT held that once creditors’ identity, mode of payment and repayment, assessee’s books of accounts proved the impugned credit transactions, it is not appropriate to look through the circumstances and section 68 cannot be invoked.
Facts of the Case
The assessee-firm trades in textile items. The sole question in the present case is that of addition of Rs.11,90,000/- as unexplained cash credit. The assessee obtained these loans from Shri Kailash Chandra Meena in individual capacity as well as that as an HUF to the extent of Rs.7,90,000/- and Rs.4,00,000/-; respectively. The AO sought to verify the identity, genuineness and credit worthiness of these loans and issued notice u/s 131. The said creditor verified to have advanced both the loans. However, the AO inter alia noticed some chinks in the above said deposition regarding the sale purchase of the sarees and other business items, acquisition of the cash amount in question, source of the opening balance and also the fact that his address was same as that of the assessee. He also found that bank account of the said creditor was introduced by Shri Pradeep Agarwal; manager and son of the assesse firm’s partner Shri Ramesh Chandra Agarwal. It further emanated that a cheque of Rs.4 lacs was credited by Shri Meena on 27.03.2006. The same was issued by Shri Pradeep Agarwal (supra). The AO also came to conclusion that Shri Meena’s returns were prima facie bogus in view of the above said discrepancies. He took into consideration all these overwhelming facts on record to treat the impugned deposits in the assessee’s accounts reading Rs.11.90 lacs as unexplained cash credits liable to be added u/s.68 of the Act.
Contention of the Assessee
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