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TMI Blog2019 (5) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... in increase in the capital of the Assessees which was also explained to the Assessees, the Assessing Authority could not have made such an addition merely on assumptions. Assessing Authority and the Appellate Authority have the power of Civil Court u/s 131 including the power to enforce attendance of the witnesses and the parties. If a half-hearted enquiry was made by the Assessing Authority and additions were made as unexplained cash credits u/s 68 and such finding of facts were reversed by the Appellate Authority, it would not give rise to any substantial question of law for our consideration u/s 260A. The two Appellate Authorities have concurrently held that those credit entires represented Trade Advances for purchase of goods and Rule 46A does not apply in the present case. No substantial question of law . - Tax Case Appeal No.249 And 250 of 2019 - - - Dated:- 1-4-2019 - Dr. Justice Vineet Kothari And Mr. Justice C.V. Karthikeyan For the Appellant : Mr.M.Swaminathan, Senior Standing Counsel assisted by Ms.S.Premalatha COMMON JUDGMENT DR.VINEET KOTHARI, J. The Revenue has filed these Tax Case (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative submitted that the appellant received advance for purchase of cashew, raw nuts and kernels from M/s.Kannan Enterprises, Kollam and this fact was brought to the notice of the Assessing Officer by letter dated 19.12.2016. It was claimed in the above letter that for the purpose of availing loans from financial institutions, the appellant required more capital and, therefore, in order to enhance the credit limit, the appellant accounted the purchase advance received from M/s.Kannan Enterprises, kollam in the capital account. It was also submitted that whenever raw nuts are supplied to M/s.Kannan Enterprises, Kollam, the same would be adjusted and it would be debited to capital account. He further submitted that the Assessing Officer had issued letter under Section 133(6) dated 2.12.2016 to M/s.Kannan Enterprises, Kollam in response to the same M/s.Kannan Enterprises, Kollam filed a letter dated 8.12.2016 in which it was confirmed by them that they had given money to the appellant and quoted the permanent account number along with dates of payments. It was also claimed that the amount was towards advance for purchase of raw nuts for the new business unit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on the decision of the Hon'ble High Court of Jharkhand in the case of Pradeep Kumar Agarwal (244 ITR 116) but in that case the Assessing Officer doubted the credit worthiness of the creditor because he was not assessed to tax. However, in the case of the appellant the creditor was assessed to tax and he had given the permanent account number to the Assessing Officer and also confirmed the credit and, therefore, the above decision is not applicable to the facts of this case. Once the creditor had given his permanent account number and confirmed the credit, the Assessing Officer could not have made this addition without conducting further enquiries to disprove the claim of the creditor but the Assessing Officer has not conducted such enquiry. As contended by the representative, the creditor could have taken bank loan during the year, and such loan might have been utilised for the purpose of giving purchase advance to the appellant. In the circumstances, the Assessing Officer without conducting further enquiries with the Assessing Officer of the creditor could not have come to the conclusion that the creditor was not having source. In the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant submitted that the Ledger Accounts of the Assessees concerned were not produced before the Assessing Authority nor the said creditor viz., Proprietor of M/s.Kannan Enterprises, Kollam was produced before the Assessing Authority and only a letter dated 8.12.2016, in pursuance of the notice issued to the Assessees, was produced before the Assessing Authority. He submitted that if any additional evidence was produced before the learned Appellate Authority, Rule 46A of the Income Tax Rules 1962 requires the matter to be remanded back to the Assessing Authority to appreciate that evidence. 9. Having heard the learned counsel for the Revenue, we are satisfied that the two Appellate Authorities viz., Commissioner of Income Tax (Appeals) and the Tribunal have examined the matter on the basis of the evidence available on record and arrived at the finding of facts that those credits were advances made by Kannan Enterprises, Kollam against purchase of materials from the Assessees, who were engaged in the business of Cashewnuts. 10. We find from the records that the Assessment Orders were passed by the Assessing Authority on 20.12.2016 after holding 3 he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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