Case Law Details
Basir Ahmed Sisodiya Vs ITO (Supreme Court)
Conclusion: Even though assessee failed to prove the genuineness of the purchases during the assessment proceedings, he filed affidavits and statements of the dealers in penalty proceedings and appellate authority had not only accepted the explanation offered by assessee but also recorded a clear finding of fact that there was no concealment of income or furnishing of any inaccurate particulars of income by assessee thus the quantum addition under section 68 would also have to be deleted.
Held: Officer, inter alia, while relying on the Balance Sheet and the books of account, took note of the credits amounting to Rs.2,26,000/- (Rupees two lakhs twenty-six thousand only) and treated the same as “Cash credits” under Section 68 and added the same in declared income of the assessee. Assessee despite being given sufficient opportunity, failed to prove the correctness and genuineness of his claim in respect of purchases of marbles from unregistered dealers to the extent of Rs.2,26,000/-. Resultantly, the said transactions were assumed as bogus entries (standing to the credit of named dealers who were non-existent creditors of the assessee). It was held that assessee in penalty proceedings offered explanation and caused to produce affidavits and record statements of the concerned unregistered dealers and establish their credentials. What needed to be noted was that the stated penalty proceedings were the outcome of the assessment order in question concerning assessment year 1998-1999. Indeed, at the time of assessment, assessee had failed to produce any explanation or evidence in support of the entries regarding purchases made from unregistered dealers. In the penalty proceedings, however, assessee produced affidavits of 13 unregistered dealers out of whom 12 were examined by the Officer. The Officer recorded their statements and did not find any infirmity therein including about their credentials. The dealers stood by the assertion made by assessee about the purchases on credit from them; and which explanation had been accepted by the appellate authority. Thus, the factual basis on which the Officer formed his opinion in the assessment order dated 30.11.2000 (for assessment year 1998-1999), in regard to addition of Rs.2,26,000/-, stood dispelled by the affidavits and statements of the concerned unregistered dealers in penalty proceedings. Appellate authority had not only accepted the explanation offered by assessee but also recorded a clear finding of fact that there was no concealment of income or furnishing of any inaccurate particulars of income by assessee for the assessment year 1998-1999. Accordingly, addition of Rs.2,26,000/- by the Officer under Section 68 towards cash credit amount shown against the names of concerned unregistered dealers for the assessment year 1998-1999, was hereby set aside.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
1. This appeal takes exception to the final judgment and order dated 21.8.2008 passed by the High Court of Judicature for Rajasthan at Jodhpur (for short, “the High Court”) in Income Tax Appeal No. 69 of 2006, whereby the appellant’s appeal was dismissed and the order of Income Tax Appellate Tribunal, Jodhpur Bench (for short, ‘the ITAT’) came to be upheld.
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