CIT Vs. FAIRDEAL CONSTRUCTION CO.

JUDGEMENT

(1.) THIS appeal by the revenue under section of the Income -tax Act, 1961 ("the Act") challenges the order dated 18/6/2010 passed by the Income -tax Appellate Tribunal ("the Tribunal") relating to assessment year 2005 -06.

(2.) THE question which arises in this appeal is thus: Whether the Tribunal was right in holding that the advances received by the assessee in cash (unexplained cash credit) was genuine and thus not chargeable to tax under section of the Act?

(3.) THE respondent -assessee is a partnership firm engaged in construction and development of properties. For the assessment year 2005 -06, the respondent -assessee filed its return of income declaring its income as Nil. During the course of assessment proceedings, the assessing officer concluded that there was cash credit in the names of 15 parties in the respondents books of account. The Explanation offered by the respondent -assessee in support of its contention was that the amounts credited in its account were genuine and paid for while booking flats with the respondent -assessee. However, the assessing officer did not accept the respondent -assessees Explanation and added an amount of Rs. 62.25 lacs to the income of the respondent -assessee by an order dated 27 -12 -2001.