Sec 68 addition limited to only current year cash credit: ITAT Mumbai
DCIT Vs B. Braun Medical India Pvt Ltd (ITAT Mumbai) Appeal Number : ITA No. 5914/MUM/2024
Facts:
1. The assessee is engaged in the business of health care catering to therapeutic segment. It is a 100% subsidiary of B. Braun Medical Ind. Sdn. Bhd., Malaysia.
2. In the course of assessment proceedings for AY 20-21, ld. Assessing Officer found that there is a liability of Rs.2 crores which remained unsubstantiated. According to him, assessee had shown a liability in respect of a creditor i.e., Santosh Trust having PAN – AAITS6921N. He also issued a notice u/s.133(6) on the alleged creditor from which no response was received.
3. Assessee furnished its explanation that the said sum was paid in the Financial Year 2015-16 relevant Assessment Year 2016-17 for which extract of bank statement reflecting the same payment from the account of the assessee from Santosh Trust was made.
4. However, the Assessing Officer held that this liability is an incorrect entry in the books of accounts and is a bogus credit balance liable to be added back to the total income of the assessee as un-explained liability u/s.68 of the Income Tax Act.
ITAT Mumbai held as under:
1. The transaction of advancing the amount to Santosh Trust pertains to Assessment Year 2016-17.
2. Section 68 applies only to cash credits in the relevant year. Since the transaction pertained to the assessment year 2016-17 and did not involve a fresh credit in the year under review, the addition is unjustified.
3. The unexplained credit must be considered in the year it appears and cannot be taxed retrospectively. Accordingly, the Revenue’s appeal is dismissed.
The Copy of the Appellate is as under:
