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TMI Blog2012 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 22-6-2012 - SHRI MUKUL Kr.SHRAWAT, And SHRI ANIL CHATURVEDI, JJ. Appellant by : Shri Mehul K.Patel Respondent by : Shri Samir Tekriwal, Sr.D.R. O R D E R PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : Both these appeals have been filed by the assessee arising form the order of the CIT(A)-VII Ahmedabad respectively dated 31/03/2005 [in respect of quantum addition] and dated 15/01/2007 [in respect of penalty u/s.271(1)(c)]. Both these appeals have been consolidated and hereby decided by this common order. [A] ITA No.1586/Ahd/2005 2. Ground Nos.1, 5, 6, 7 8 are either not pressed or consequential in nature, hence need no independent adjudication. 3. Ground No.2 and sub-grounds are in respect of an addition of Rs.16,50,000/- as cash credits and unaccounted income of the appellant firm. 3.1. The assessee-firm is in the business of trading in electrical goods. From the balance-sheet, it was noted by the AO that the assessee has disclosed advances from customers . The AO has enquired about the genuineness of the transaction. The AO has noted the names of eleven parties and the respective amounts which were claimed by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een received. Also that the AO had not questioned the genuineness of the purchase of said pumps, which had been made through the account payee cheques and authenticity of sale bills raised on said parties, evidencing delivery of pumps to these same parties. It was also submitted that during the year under consideration, the appellant firms was awarded a contract for supplying of submersible pumps to Ahmedabad Municipal Corporation to the tune of Rs.152 lakhs. Since the appellant had never handled such a huge demand, it had to accept cash advances from farmers, to whom it was able to supply said pumps in the next financial year only. Before the AO, the appellant had produced sales bills and cash receipts and sales tax paid on those sales. The appellant has also contended that the AO had followed an erroneous and incomplete procedure of enquiry while trying to locate villagers/farmers who had paid said cash advances. The AO had also never verified the various items of evidence submitted by the appellant, such as receipts of advance payment received by the appellant, copies of sales bills against said advances, purchase order copy, sales tax assessment order etc. The appellant has q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing written in Gujarati, hence considering the objection of the ld.DR is hereby ignored. Ld.AR has also furnished the bills issued in the names of those parties and informed that in the subsequent assessment year, i.e. A.Y. 2002-03 sales were made to the tune of Rs.49,03,203/- for the period ending 31.03.2002 and those sales were inclusive of the sales made to the said parties. He has argued that the enquiry was not properly conducted and that one-sided enquiry was made the reason of doubting those parties. Once the Sarpanch of the Village has confirmed the existence of those villagers, then there was no occasion to doubt existence of those parties. 7. We have considered the totality of the facts and circumstances of the case. The assessee-firm is admittedly in the business of trading of electrical goods. Facts of the case have revealed that the assessee has received cash amount in advance which was reflected in the books as advances from customers . Those customers were 11 in number out of which one customer has been repaid the amount and the repayment was evidenced by the details of cheque and corresponding bank entries. As far as the evidences in respect of advances received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has furnished the audited copy of the Profit Loss account along with balance-sheet wherein the sales to the tune of Rs.49,03,203/- was reflected and those sales have included the sales made to those 10 parties as per the list of the total sales placed before us. Once the assessee has paid the tax on the amount which was alleged to be introduced as cash credit in the books of account, therefore the Revenue should have examined this aspect on those lines as per the provisions of law. At the most, the cash credit amount was subject to tax by invoking section 68 of IT Act but those figures were ultimately recorded as sales and paid tax thereon by the assessee himself in the subsequent financial year. For the argument sake, if the addition is hereby sustained, then in consequence thereupon the said amount shall get reduced from the sales amount of the subsequent year. Meaning thereby no useful purpose shall be served as far as the repercussion of tax is concerned. Next, an another factual aspect needs due consideration was that the Assessing Officer had not doubted the purchases of the pumps, stated to be by account payee cheques and, thereafter, the corresponding sales being ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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