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TMI Blog2018 (10) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... s deleted by the Tribunal. This action of the Tribunal has been upheld by the Hon’ble jurisdictional High Court [2016 (6) TMI 115 - CALCUTTA HIGH COURT]. The action of the Ld. CIT(A) cannot be sustained. We also note that in this case, the claim of the assessee is ₹ 3,69,74,806/- whereas the AO has disbelieved ₹ 60,00,000/- which is an ad hoc disallowance without rejecting the audited books of account which is an arbitrary exercise of power which action of the AO/Ld. CIT(A) cannot be countenanced. - Decided in favour of assessee. - I.T.A. No. 383/Kol/2017 - - - Dated:- 12-10-2018 - Shri A. T. Varkey, JM And Shri M. Balaganesh, AM For The Appellant : Shri S. M. Surana, Advocate V. N. Purohit, FCA For The Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records and documents collected by him u/s. 133(6) of the Act. According to AO, verification notices u/s. 133(6) of the Act was issued to different parties to verify the veracity of the advances from customers. The AO acknowledges that replies from some of the parties have been received however, according to AO some of the letters dispatched by speed post returned back un-served. The assessee was asked to explain the reasons as to why the verification letters could not be served in address given by the assessee. According to AO, the assessee failed to furnish satisfactory reply. So, AO did not accept the contention of the assessee that the advances from customers are genuine and are being adjusted with the subsequent sale. According to AO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counting, wherein it is receiving advance deposits from customers on account of sale of motor cycle being a dealer in automobile. Whenever the sale is taken place, within one to two months, these deposits are adjusted against sale price of the motor cycle. This fact is admitted by both the sides. The issue is whether the assessee is consistently following certain system of accounting which had been accepted by the department from the very beginning and even in future years. There is no change of system of accounting followed by the assessee. Allowing the department to adopt a different approach altogether in this assessment year in question would create an anomalous situation as far as the assessee is concerned. The issue that the dealer re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble High Court by the revenue against the action of the Tribunal is noted from page 58 of the paper book, which reads as under: Whether on the facts and in the circumstances of the case the Learned Tribunal was justified in law in not deciding the merits of the case and the applicability of Section 68 of the Income Tax Act and arrived at a finding which is contrary to the evidence on record thus giving rise to perversity. 6. Wherein the Hon ble High Court took note of the facts that It appears that nearly a sum of ₹ 4 crores was found credited to the books of accounts of the assessee allegedly on account of advance received from the buyers of motor cycles. The Assessing Officer was of the opinion that a bogus lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the time of delivery of two wheelers they issue invoice to the customers and take back the money receipts of advance payments and adjust the advance against sale price of two wheelers. The assessee may not have maintained detailed record of the customers. But question is whether the receipt has satisfactorily been established to be on account of advance payment. That question has been answered by the learned Tribunal in the affirmative by holding as follows: The advance money, in the present case before us, is adjusted the sale price of the motor cycle and sale is disclosed in the return of income i.e. the trading account of the assessee. Accordingly, we find no ambiguity in the system followed by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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