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TMI Blog2016 (2) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... e treating the same as unexplained cash credit under section 68. 2. The assessee in the present case is a partnership firm, which is engaged in the business of M.R. Distributorship. The return of income for the year under consideration was filed by it on 25.11.2009 declaring total income of Rs.9,330/-. During the course of assessment proceedings, the Assessing Officer noticed that the assessee is claimed to have received cash advances of Rs.11,15,131/- mainly at the beginning of the year as well as at the end of the year. In this regard, it was explained by the assessee that the said advances in cash were received by it from 22 M.R. Dealers and the same were finally adjusted against the sales subsequently made to them. Two of such 22 M.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the initial period of the year from 01.04.2008 to 10.04.2008. (d) In view of the above observations, the Assessing Officer was of the view that the appellant had failed. to explain the nature and source of the purported cash advances from customers satisfactorily as laid down by the provisions of section 68 of the Act." For the reasons given above, the Assessing Officer treated the cash advances of Rs.11,15,131/- as unexplained and added the same to the total income of the assessee under section 68 in the assessment completed under section 143(3) vide an order dated 19.12.2011. 3. Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that advances are accepted in certain businesses, it is very difficult to accept, especially in the line of the appellant's business of wholesale trading in food grains, that advances would be received and that too in exact amounts right up to the second decimal place matching the respective sale amounts. (d) There are instances of customers making small advances on a particular date followed by advances on the immediately succeeding dates. For example, Shri Sanjib Manna advanced an amount of Rs. 2562/- on 09.04.2008 and a separate amount of Rs. 2562/- on 10.04.2008, which is unusual and against human probabilities". Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided the issue going by the aspect of preponderance of probabilities. No doubt the preponderance of probabilities can be taken into consideration for deciding the issue if it is found that what is apparent is not real. However, if the facts of the present case are considered in the light of the evidence brought on record by the assessee, it was a case of advances received by the assessee in cash from his dealers and the same having been adjusted against the sale subsequently made to the said dealers, there was no reason to apply the theory of preponderance of probabilities, especially when there was nothing brought on record to doubt the explanation offered by the assessee. There was also no inquiry made by the Assessing Officer with the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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