Mahendra Mohiniraj Gandhe Vs ACIT (ITAT Pune)
Section 68 can be invoked only when sum is credited in the books in the relevant previous year- Pune ITAT
An amount of Rs.10 Lakhs was found to be the opening balance of assessee during Financial year 2015-16. During scrutiny assessment, it was found that the said amount was credited in the books during the Financial year 2011-12 in respect of loan. This was added to income of assessee in Financial year 2015-16 on grounds that it was treated as unexplained cash credit u/s 68. Ledger Account was reproduced by the AO in the assessment order which shows the amount as opening balance of Financial year 2015-16. On appeal, CIT had confirmed the addition.
As per sec. 68, only if such sum is credited in the books in Financial year 2015-16, addition can be made. It is evident in this case that such sum was shown as opening balance in Financial year 2015-16, which implies it was credited in books before said Financial year.
ITAT held that AO had no jurisdiction to invoke sec. 68 when such sum is not found credited in the books during Financial year 2015-16 & merely forms part of opening balance.
