MR. GURMUKH SINGH BALI,NEW DELHI vs. JCIT, NEW DELHI

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ITA 4762/DEL/2014Status: DisposedITAT Delhi29 June 2016AY 2010-113 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that if credits represented opening balances from previous years or were for purchases of fixed assets on credit, no addition under Section 68 could be made. The matter was set aside to the Assessing Officer for verification.

What were the facts?

The assessee's appeal concerned additions made under Section 68 for the Assessment Year 2010-11. The additions related to certain credits appearing in the assessee's books.

What were the issues?

Whether additions under Section 68 are justified for credits representing opening balances or for purchases of fixed assets on credit.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI

Before: SHRI J. SUDHAKAR REDDY

This is an appeal filed by the Assessee directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi pertaining to the A.Y. 2010-11 dated 3.6.2014.

2.

The only issue for our consideration is the addition made under section 68 of the Income Tax Act, 1961 (the Act).

3.

On a careful consideration of rival contentions I find that in the case of M/s Friends Alloys, M/s Dee Pearls P Ltd. and Vardhaman Industries, the credits are not pertaining to this year. These amounts are opening balances carried forward from the Previous Year . Hence no addition can be made during this year. Anyhow, keeping in view the submissions of the Ld. Sr.D.R. we set aside the issue to the file of the Assessing Officer for verification. In case these credits are closing balances of the earlier financial year, no addition can be made during the year. 1

4.

As regards the credits in the name of M/s Seasons Furnishing, M/s Cosyco International, M/s Charnock Auto Product, the Ld. Counsel for the assessee submits that fixed assets were purchased and these credits were outstanding on such purchases and that the same were repaid in the immediately succeeding Assessment Year. When fixed assets are purchased on credit and when the purchase has been accepted, no addition can be made under section 68 of the Act. Anyhow I set aside this issue to the file of the AO with a clear direction that no addition can be made under section 68, if these credits have arises due to credit purchases of fixed assets.

5.

In the result the appeal of the assessee is allowed for statistical purposes.

Pronounced in the Open Court on 29th June, 2016.

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