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TMI Blog2013 (2) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... chased the goods he had no relation whatsoever with the assessee. The AO therefore was only to consider the identity, genuineness and creditworthiness of the purported loan creditors on the basis of confirmations and income tax documents filed before him which were self sufficient – No addition should be made u/s 68 – In fafour of assessee. Discount to customers - Merely because the receipt vouchers were made by the assessee cannot be a ground to make ad hoc disallowance out of the claim of discount – such ad hoc disallowance cannot be sustained for legal scrutiny, without identifying a particular customer who could not be said to have availed such discount – In any case, the discount for disallowance has to be identified on specific finding which is lacking in the instant case – In favour of assessee. Donations made to “pooja” committees – In this respect impugned orders of the authorities was upheld – Against the assessee. - ITA No.176/CTK/2011 - - - Dated:- 13-1-2012 - Shri K.K. Gupta and Shri K.S.S. Prasad Rao, JJ. For the appellant : Shri J.M. Pattnaik,AR For the respondent : Shri A. Bhattacharjee, DR ORDER Shri K.K. Gupta, AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased the tractors inscribed in the sale bills. The cash vouchers supported of having granted the discount against the advance received or the payment received otherwise was prepared by the Accountant which was considered as self made vouchers by the Assessing Officer. On estimation, he has disallowed a sum of Rs. 4 lakhs there from which was also appealed against before the first appellate authority. The Assessing Officer disallowed a sum of Rs. 40,870 claimed as donation in the Profit Loss account which was explained to have been incurred for local pooja committees on various festive occasions. Legally untenable the same was disallowed by the Assessing Officer. These two issues have been added in the modified grounds of appeal by the assessee retaining the original ground being the confirmation of unsecured loan u/s.68 amounting to Rs. 22,01,000. 3. The learned Counsel for the assessee initiating his arguments submitted that the Assessing Officer was apprised of the fact that all six parties had advanced against purchase of tractors to be billed in the subsequent year cannot be termed as unsecured cash credits in the literal meaning thereof. The Assessing Officer having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of rs.3 lakhs as unsecured loan was brought forward, the Assessing Officer accepted the version that the same was adjusted against sales in the impugned Assessment Year ought to have appreciated the same for accepting the explanation offered by the assessee in the first place. The creditors who ae actually customers would be more than happy to confirm the same if were to appear before the Assessing Officer but because they are merely customers who had purchased the goods on the basis of bills drawn on them were not required to appear before the Assessing Officer as loan creditors. It is mandatory for the assessee to disclose advance received from customers other than as sundry creditors and not cash creditors. Sundry creditors for expenses were allowed by the Assessing Officer without finding any infirmity therein. He therefore prayed that the sum of Rs. 18,23,000 cannot be taxed in the impugned Assessment Year for the simple reason that the same is against bills drawn in the subsequent year and are not creditors in the literal sense of its meaning insofar as they cannot have been verified for their identity, genuineness and creditworthiness. It was not the case for the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly noted in his order that the loans were not trade creditors. 7. With respect to the issue on estimate disallowance of discount, the learned DR produced the order sheet copy of the assessment folder where the assessee s Counsel had agreed to the estimate disallowance of discount claimed. 8. We have heard the rival contentions and perused the material available on record. On carefully consideration of the facts and circumstances of the case, we are inclined to hold that having called for the details and the confirmations it became clear to the Assessing Officer that these persons who had paid the amount in Demand Drafts on various dates had paid the amounts for purchase of tractors which were adjusted against the advance of the impugned Assessment Year in the subsequent Assessment Year. The Assessing Officer has merely denied these confirmations for acceptance in the light of the fact that the amounts had been received by account payee Demand Drafts without identifying as to how advance received against sales can be denied as unexplained cash credit u/s.68. The Assessing Officer therefore identified that Shri Haji Hamid Ahmed and S. Fazlur Rahman were purely loan creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s hereby deleted. 9. On the issue of estimated disallowance of discount of Rs. 4 lakhs, we are of the considered view that the documentary evidence submitted at the time of claim of such discount was self-sufficient more so because the sale bills were also drawn by the assessee only. The Assessing Officer therefore having satisfied on total discount, disallowed on estimation without identifying customers who could not have availed such discount but were shown as having received the discount from the assessee. The assessee has declared the sales to earn the dealership commission from Mahindra Tractors and therefore claimed the discount in the Profit Loss account by foregoing the part of the dealership commission as is prevalent in such kind of business. Merely because the receipt vouchers were made by the assessee cannot be a ground for the Assessing Officer to make ad hoc disallowance out of the claim of discount. In our considered view, such ad hoc disallowance as made in the instant case cannot be sustained for legal scrutiny even if such ad hoc disallowance was admitted by the then learned AR of the assessee before the authorities below without identifying a particular custo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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