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2013 (11) TMI 132 - AT - Income TaxAddition on account of unexplained advances received from customers Assessing Officer has made addition of Rs. 28 lakhs in respect of advances of Rs. 25 lakhs shown to be received from M/s. Jot Agro Processors P. Ltd. and Rs. 3 lakhs from M/s Madura Agro Food Inds - As far as the advance received from M/s. Jot Agro P. Ltd. is concerned The appellant has filed evidence being copies of various documents including confirmed copy of account of the appellant in the books of that company and wherein permanent account number of the company has been duly indicated - The amount of Rs. 3 lakhs claimed to be received from M/s. Madura Agro Food Inds. - The entry have been cross checked with the entries in the books of that company The addition made by the Assessing Officer is based upon non-application of mind to the facts of the case and non-appreciation of the provisions of section 68 Decided against Revenue.
Issues Involved:
- Appeal against deletion of addition of unexplained advances received from customers. - Interpretation of provisions of section 68 of the Income-tax Act, 1961. - Assessment of evidence provided by the appellant to support the advances received. - Comparison of findings between the Assessing Officer and the Commissioner of Income-tax (Appeals). Analysis: Issue 1: Appeal against deletion of addition of unexplained advances received from customers The appeal filed by the Revenue contested the deletion of an addition of Rs. 28,00,000 made by the Assessing Officer on account of unexplained advances received from customers. The main contention was the non-furnishing of permanent account number and bank account number by the appellant. However, during the appellate proceedings, the appellant provided detailed submissions, including evidence such as confirmed copies of accounts and permanent account numbers, which were considered a plausible explanation under section 68 of the Act. The Commissioner of Income-tax (Appeals) found the submissions to be valid and deleted the impugned addition after thorough consideration of the facts and evidence presented. Issue 2: Interpretation of provisions of section 68 of the Income-tax Act, 1961 The crux of the matter revolved around the application of section 68 of the Income-tax Act, 1961, which deals with unexplained cash credits. The Assessing Officer's addition was based on the lack of PAN and bank account details for the advances received. However, the Commissioner of Income-tax (Appeals) analyzed the evidence provided by the appellant, including confirmed documents and explanations for discrepancies, and concluded that the provisions of section 68 were not contravened in this case. Issue 3: Assessment of evidence provided by the appellant to support the advances received The appellant's submissions during the appellate proceedings played a crucial role in the final decision. By presenting detailed evidence, including confirmed copies of accounts and explanations for discrepancies, the appellant successfully demonstrated the genuineness of the advances received from the customers. The Commissioner of Income-tax (Appeals) carefully considered this evidence and found it to be satisfactory, leading to the deletion of the addition made by the Assessing Officer. Issue 4: Comparison of findings between the Assessing Officer and the Commissioner of Income-tax (Appeals) Upon reviewing the findings of both the Assessing Officer and the Commissioner of Income-tax (Appeals), it was evident that the latter's decision was well-founded. The Commissioner's conclusions aligned with the provisions of section 68 of the Act and took into account the factual matrix of the case. The dismissal of the Revenue's appeal was based on the Commissioner's thorough consideration of the evidence and application of the relevant legal provisions. In conclusion, the judgment by the Appellate Tribunal ITAT Chandigarh upheld the decision of the Commissioner of Income-tax (Appeals) to delete the addition of unexplained advances received from customers, emphasizing the importance of providing adequate evidence and explanations to support such transactions under section 68 of the Income-tax Act, 1961.
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