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TMI Blog2017 (1) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(Appeals) has given a finding that the advances were for business expediency as the parties were in the farm vehicle and supply business related to the assessee. The short term advance to them is compensated by business provided by them - Decided in favour of the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... as the firm has kept the stock of chilly with the said concern. The AO, therefore, issued a letter to best Cold Storage Pvt. Ltd. to give details of goods belonging to the assessee stored in its storage. The Best Cold Storage Pvt. Ltd. furnished the details of material belonging to the assessee stored in its storage which is reproduced in para 5.1 of the assessment order. The assessee submitted before the AO that the goods kept in the Best Cold Storage belong to the assessee, the agriculturist, and the buyers and suppliers of the chillies. The assessee further submitted that they mainly play a role of facilitator in respect of others goods since they have to provide services to their agricultural clients. The Best Cold Storage Pvt. Ltd., su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee pleaded before the AO that the stock lying in Best Cold Storage Pvt. Ltd. is out of the opening stock but the AO has discarded the contention of the assessee by stating that no evidence of opening stock kept with cold storage is furnished by the assessee. The AO therefore, treated the entire stock valued at ₹ 30,87,940/- kept in the Best Cold Storage as unexplained investment in stock purchased during the year and accordingly added the same to the total income of the assessee u/s 69 as unexplained investment in chillies. 3. Upon assessee's appeal learned CIT(Appeals) elaborately considered the submissions and gave the finding that the aforesaid stock of red chillies with the Best Cold Storage were out of opening stock w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening Closing 2005-06 - 1839/484 2006-07 1839/484 2517/38 2007-08 2517/38 707/00 2008-09 707/00 336/64 On perusal of the audited accounts, it is seen that the opening sock of 707.00 quintals was in excess of the stock of 593.59 quintals of 1340 bags. The appellant in support of his claim has also enclosed the quantitative details of stock movement. The appellant has also furnished the month-wise consolidated statement of red chillies in quintals prepared on the quantitative details of stock maintained. Thus, the appellant has demonstrated that the stock available at any time in his books was much more than the stock shown in the Best Cold Storage. Therefore, the contention raised by the appellant that the stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closing stock and without finding any infirmity in the books of account. The ld. AO having not done the relevant exercise to arrive at a definite finding of a fact, the general inference drawn by the ld. AO merely on the basis of stock statement supplied by Best Cold Storage that the same is outside the books is not sustainable in the eyes of the law. In view thereof, the addition made by the ld. AO based on surmises and guess work in the absence of any corroborative evidence in hand is directed to deleted." 4. Against above order Revenue is in appeal before the ITAT. 5. I have heard both the counsel and perused the records. I find that upon examination of the records the learned CIT(Appeals) has given a finding that the stock of red ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 25.20 lacs./- 8. Upon assessee's appeal Learned CIT(Appeals) deleted the addition by accepting the asseessee's submission that the advances were made out of business expediency. The learned CIT(Appeals) held as under : "On careful examination of the material facts as emanated from the submissions of the AR of the appellant, it is seen that AR has mainly contended that the interest free advances to Hanuman Tractors of ₹ 23.20 lacs and ₹ 2 lacs to two other parties are given out of business expediency. The loan advanced to Hanuman Tractors as fee of interest is stated to be for its farm vehicle supply and service business. The appellant has further submitted that Sonal Agro and Venkatesh Traders support the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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