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TMI Blog2003 (9) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the assessee will derive benefit of enduring nature. In support, he also placed reliance on the ratio of decision in the case of CIT vs. Arawali Constructioin Co. (P) Ltd. (2002) 177 CTR (Raj) 79 : (2003) 259 ITR 30 (Raj). He also made reference to the decisions reported in Shriram Refrigeration Industries Ltd. vs. CIT (1981) 127 ITR 746 (Del); CIT vs. Elecon Engineering Co. Ltd. (1987) 166 ITR 66 (SC); CIT vs. Premier Automobiles Ltd. (1993) 114 CTR (Bom) 30 : (1993) 206 ITR 1 (Bom), and (2002) 177 CTR (Raj) 79 : (2003) 259 ITR 30 (Raj). 3.2 The learned counsel for the assessee on the other hand, submitted that the nature of the business of the assessee basically was trading in hardware computers. He pointed out that in the first round vide order dt. 8th March, 1996, while setting aside the assessment and restoring the matter to the file of AO for fresh examination, the learned CIT(A) had issued specific directions but the learned AO reframed the assessment without making any enquiry and without making compliance to such directions. The learned counsel also contended that the assessee had maintained account books and in the account books relevant entries were made. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of the parties with the aid of information made available before him by the assessee and also the information originally furnished by it. The learned CIT(A) also directed the AO to examine the nature and services rendered by these parties and the nature of software sold to the assessee. 3.5 In compliance to the order of the learned CIT(A) dt. 8th March, 1996, the AO directed the assessee to furnish details. He has observed that the assessee could not give any evidence about the claim of payment of software development charges. He has also observed that on the date of hearing, i.e., 17th March, 1998, Shri A.K. Jain, CA was present and hearing of the case was adjourned to 19th March, 1998. On 19th March, 1998 Shri Ajay Jain was produced and his statement was recorded and hearing was adjourned to 20th March, 1998. On 20th March, 1998 none appeared, hence the AO made fresh assessment by filing (sic) the order of his predecessor. 3.6 In the impugned order, the learned CIT(A) has observed that in view of the clear direction of his predecessor the requisite evidence was already on record and it was for the AO to take cognizance of the same and thereafter to arrive at a reasonable de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tware development. Once the appellant furnished the address as found in its records and had also confirmed that the payments had been made by cheques and had also indicated the nature of purchases made from them, the primary onus cast on the appellant should be deemed to be discharged. Thereafter if the payments are to be held as bogus or for extra commercial consideration, then the only way would be to examine the bank accounts through which the cheques issued by the appellant had been cleared to see the ultimate beneficiaries of the payments. It is also not uncommon that between the time of the actual transaction and the point of enquiries by the Department, the concerned persons might change their business premises. This is substantiated by the fact that the appellant has furnished now the new addresses of M/s Govind Computers and M/s Goyal Computers. In these circumstances, I am of the view that the entire issue should be restored to the file of the AO for making thorough enquiries in respect of each of the persons, with the aid of the information now made available by the appellant and also the information originally furnished by him in the course of the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is rejected. 4. Ground No. 2: This ground is directed against the deletion of Rs. 8,28,000 on account of advance received from parties. The assessee has shown receipt of advance from 53 parties. During the assessment proceedings, the assessee was required to file confirmation from these parties. The assessee could not file the confirmation. The AO also made independent enquiries and held that the assessee had picked bogus liabilities. He, therefore, made addition of Rs. 8,24,918 by observing as under: "The above discussion clearly proves that the advances shown by the assessee-company are nothing but means of suppression of this taxable income. The assessee could file acceptable confirmation from Anmol Leasing for an advance of Rs. 52,000 and in response to summons under s. 131, M.B. Sons of Jaipur have confirmed advances of Rs. 19,250 to the assessee-company. This way advances of 71,250 are explained. The assessee has received total advances of Rs. 8,96,168. Out of these, advances to the extent of Rs. 8,24,918 (8,96,168 -71,250) remained unexplained. Accordingly, an addition of Rs. 8,24,918 is hereby made in the income of the assessee as unexplained advances." 4.1 This add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT(A) has deleted the addition by observing that in compliance with the order of his predecessor the AO was required to examine the account of each party to see as to whether the advances had fructified into sales in the next year and had been accounted for as an income or not. He has observed that since this exercise had not been carried out by the AO and the matter could not be kept alive perpetuatedly, the addition was deleted. 4.3 After going through the various orders, referred to above, we find that the AO was duty-bound to examine the matter in the light of directions issued to him by the learned first appellate authority. Since he failed to do so, in our opinion, the learned CIT(A) was justified to delete the remaining addition. It may be pointed out that the learned AO had made the disallowance only on ad hoc basis by estimate. In our considered view this course was not available to him because the parties were specific and details were specific. Hence, disallowance of any amount relating to advance could have been specific. Thus, we are unable to accept the plea of the Department. Ground No. 2 is accordingly rejected. 5. Ground No. 3: This ground is directed again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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