Unexplained Cash Credit u/s 68 of the Income Tax Act

This case concerns an appeal by Asha Analytical Instruments (P) Ltd against the confirmation of an unexplained cash credit of Rs. 2,83,92,066 under Section 68 of the Income Tax Act. The company argued the funds were received via RTGS/NEFT for supplying analytical instruments. They also contested an addition of Rs. 11,42,414 for business expenditure. The company sought to submit additional evidence due to operational cessation and unavailability of records.

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH “B”, HYDERABAD

BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
AND
SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER
ITA No.2027/Hyd/2018
Assessment Year: 2014-15

Asha Analytical
Instruments (P) Ltd,
Secunderabad.
PAN: AAICA 6505 D
(Appellant) 

Vs. 

Income Tax Officer,
Ward-1(2),
Hyderabad.
(Respondent)

Assessee by: Shri P.N. Moorthy
Revenue by: Shri Rohit Mujumdar, DR

Date of hearing: 24/03/2021
Date of pronouncement: 01/07/2021

ORDER

PER A. MOHAN ALANKAMONY, AM.:

This appeal is filed by the assessee against the order of the ld. CIT(A)-1, Hyderabad in appeal no. 0281/CIT(A)-1/Hyd/2016-17/2018-19, dated 22/6/2018 passed U/s. 144 r.w.s 250(6) of the Act for the AY 2014-15.

2. The assessee has raised four grounds in its appeal and they are extracted herein below for reference:-

“1. That the Ld. CIT (A) is not justified by confirming the amount of Rs. 2,83,92,066/- as unexplained cash credit U/s. 68 of the IT Act, 1961, as it was held by the AO in order U/s. 144 dated 31/12/2016.

2. That the said amount of Rs. 2,83,92,066/- was being the amount received by the appellant company through RTGS and NEFT and deposited in various banks held by the appellant company from M/s. Megsan Labs Pvt Ltd through Bank of India account held by it for supply of various kinds analytical instruments.

3. That the Ld. AO was not justified making a separate addition of Rs. 11,42,414/- out of Rs. 22,84,829/- under various heads of expenditure being they were incidental to the business carried out by the appellant as against the turnover of Rs. 3,08,81,294/- and confirmed by CIT (A) is erroneous.

4. Prayer: It is prayed before the Hon’ble Bench of the ITAT that the appellant may please be allowed to submit additional evidence under Rule 29 of the ITAT Rules, 1963, in support of the above grounds as bank accounts were not readily available at the stage of assessment and appeal proceeding. Since the operations of the appellant company ceased to function for more than two years, it unable to submit any records during the assessment/appeal stage to substantiate its claim.”

3. At the outset, the Ld. AR submitted before me that there is a delay of 39 days in filing the appeal before the Tribunal. In this regard, the assessee had submitted a petition for condonation of delay wherein the reasons for filing the appeal beyond the prescribed time limit were explained. For reference, the relevant portion from the affidavit is extracted herein below: -

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