Kuber Finance (I) Ltd. Vs ACIT (ITAT Delhi)
Section 68 – Cash Credits – Year of taxation is determined by date of credit in books, not actual receipt in bank account: ITAT Delhi
The assessee had received the amount on 31.03.1996, and it was reflected in the bank accounts of both the assessee and the lenders, but the entry was credited in the assessee’s books of accounts only on 01.04.1996. The core issue in this case was the addition of unexplained cash credits under Section 68 of the Income Tax Act, 1961. The assessee argued that the funds had been received in the earlier financial year relevant to AY 1996-97 and therefore could not be taxed in AY 1997-98 (i.e., next AY). However, the Tribunal clarified that under Section 68, unexplained sums are taxable in the year in which they are credited in the books of account, irrespective of the date of actual receipt in the bank account. Since the entries were credited on 01.04.1996, they fell within AY 1997-98. Consequently, the ITAT upheld the addition, dismissed the appeal, and confirmed the validity of the assessment in AY 1997-98.
FULL TEXT OF THE ORDER OF ITAT DELHI
The above captioned appeal is preferred by the assessee against the order dated 31.10.2019, passed by the Learned Commissioner of Income Tax(Appeals)-5, New Delhi (hereinafter referred to as ‘ld. CIT(A)), under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for Assessment Year 1997-98. The assessment order in this appeal is passed by the Assessing Officer [for short, AO] under section 143(3) r.w.s. 153A of the Act.
