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The sale proceeds have been shown as income in the sense that after deducing the cost of the asset from the sale proceeds, the balance has been declared as capital gains and therefore the sale proceeds cannot be probed under section 68 and the assessee cannot be asked to prove the nature and source of the monies.

Shanti Prime Publication Pvt. Ltd.

Sec. 68 of Income Tax Act, 1961—Cash Credit—Once the purchases have been accepted as genuine and no adverse inference has been drawn, the lower authorities were not at all justified in making the addition.

Facts: The solitary grievance of the Assessee is that CIT(A) erred in upholding the disallowance of Rs. 10,167,885/- made by the Assessing Officer on account of confirmations not received from creditors.

Held, that it is an undisputed fact that the AO has simply added the balance as on 31.3.2004 without realizing that the entire credit balance were the outcome of the purchases made during the year. It is also undisputed that in the immediately succeeding years the outstanding have been paid by the assessee. Once the purchases have been accepted as genuine and no adverse inference has been drawn, the lower authorities were not at all justified in making the addition of the balance outstanding as on 31.3.2004. We do not find any merit in the addition sustained by the CIT(A), hence, the entire addition made by the AO is directed to be deleted. - IKEA TRADING (INDIA) PRIVATE LIMITED. V/s DEPUTY CIT - [2020] 26 ITCD Online 111 (ITAT-DELHI)