9911796707
TMI Blog2013 (2) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... ord are that the assessee, a partnership firm, is a dealer of tractors and spare parts manufactured by Mahindra Tractors. In the course of its business transactions it filed return of income showing income of Rs. 41,751. During the assessment proceedings u/s.143(3),the AO verified the books of account and other documents and sought explanation for the amount of unsecured loans amounting to Rs. 25,01,000 when the assessee filed confirmations of the unsecured loan creditors. The Assessing Officer observed that the amount had been received by Demand Drafts when he sought to delete the sum of Rs. 3 lakhs as pertaining to the earlier year. With respect to two loan creditors namely, Shri Hazi Hamid Ahmed and S.Fazlur Rahman, it was submitted by the assessee that these two are the loan creditors who had advanced money to the assessee as friendly loans without bearing any interest. The Assessing Officer required the assessee to establish the identity, genuineness and creditworthiness when the assessee explained that the sum of Rs. 18,23,000 represented advance received from the buyers of the tractors from the assessee having specific colour, utility and spare parts requirements. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel has filed the subsequent bills raised in the Financial Year 2007-08 in the case of Bijay Kumar Khuntia ( page 44), B.B.Nayak (page 40), Aziz Khan ( page 47), P.Pradhan (page 500, Susama Dalai ( page 53) and Santosh Tarani (page 58). These bills indicate that these sales bills have adjusted the advance received in the impugned Assessment Year. The remaining two loan creditors namely S.Fazlur Rahman and Haji Hamid Ahmed had furnished their copies of returns along with the bank accounts indicating the creditworthiness for the amount advanced to the assessee as a friendly loan. He submitted that the Assessing Officer confining himself to the unexplained cash credit u/s.68 did not consider these explanation satisfactory which the learned CIT(A) considered in detail but sustained the Assessing Officer's examination when the requirement of the loan creditors and customers to personally appear before the Assessing Officer was held as the assessee's inability to substantiate the claim for denying addition u/s.68. The learned Counsel argued that it was not the case of the Assessing Officer that the assessee was not able to explain to the satisfaction of the Assessing Officer except non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disallow on estimation just because the vouchers, which were obtained from the customers at the time of final settlement of their bills were made by the assessee. The Assessing Officer verified that the customers on whose names the bills were drawn were the persons who had received the discount were same therefore could not be disallowed merely on estimation out of Rs. 28lakhs a sum of Rs. 4 lakhs without identifying the particular customer who could not be said to have availed such discount. 5. With respect to last ground regarding the donation, he submitted that the donations were made to local "pooja" committees on festive occasions were mandatorily required by the assessee and was entitled to the assessee's business which may kindly be considered to be allowed. 6. The learned DR opposed the contention of the learned counsel for the assessee. He submitted that the Assessing Officer required the assessee to furnish the details of the loan creditors amounting to Rs. 22,01,000 when only the confirmations were produced. Merely furnishing of details of the payments received against Demand Drafts was not sacrosanct was considered by the learned CIT(A) as well as not satisfactorily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired for substantiating that the six parties were loan creditors when the sale bills drawn were available to the Assessing Officer on the confirmations furnished by the six persons who had purchased the tractors. The income from sale of tractors had been rendered to tax in the subsequent year was not disputed. The sundry creditors and the stock of tractors lying with the assessee for the impugned Assessment Year was not challenged and the bank loan against hypothecation of the stock of tractors lying with the assessee were not challenged. All these clearly indicate that the assessee was not to be burdened under the provisions of Section 68 in respect of the six parties who have been adjusted from their advance in the subsequent sales and further more the two persons who could not appear before the Assessing Officer had adequately established their identity, genuineness and creditworthiness as per the notings of the authorities below. In our considered view, we are of the opinion that the assessee had discharged the onus which lay upon him and it was not the case for the Assessing Officer to make pertinent note of the disclosure in the balance sheet that the trade creditors were to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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