Case Law Details
Shri Hitesh Kumar Gupta Vs ITO (ITAT Jaipur)
The issue under consideration is whether the addition made by AO u/s 68 of Income tax Act, 1961 is justified in law?
In the present case, the Assessing Officer made the addition of capital employed in the business U/s 68, on the ground that the assessee must be requiring the funds to run the business as he makes credit sales.
ITAT states that the Assessing Officer made the addition U/s 68 on the ground that sales are made on credit basis and funds would be required/tied up in sundry debtors. In our view, such an addition cannot be sustained by invoking the provisions of section 68 which talks about any sum found during the books of accounts and in respect of which the assessee offers no explanation or the explanation so offered is not found satisfactory. In the instant case, there is no sum which is found credited in the books of accounts of the assessee and hence, on this ground itself, the assessee deserve the relief and the addition so made is hereby deleted. Hence, the appeal filed by the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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