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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 ..... d they admitted of having been given the cash advances to the assessee. Having regard to all these facts of this case, advances except the advance received by the assessee on 30.03.2009 having been already adjusted against the sales made by the assessee to the concerned Dealers and the sales so made having been duly accounted for by the assessee, the corresponding advances could not be added to the total income of the assessee u/s 68 treating the same as unexplained. As regards the advance claimed to be received by the assessee we however, find that the assessee has failed to explain the same in terms of section 68 and the addition made by the AO and confirmed by the CIT(A) to this extent is liable to be sustained. Appeal of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer for verification. They admitted of having given the advances in cash to the assessee and also stated that it was a regular practice being followed to give advances in cash and to adjust the same against the supply of food grains. This explanation of the assessee as regards the cash advances, however, was not accepted by the Assessing Officer mainly for the following reasons :- (a) The appellant was not able to explain as to why the advances were accepted only on dates when the cash balance as per the cash books would have been negative if the advances had not been accepted. (b) The advances were accepted in cash and no concrete evidence could be furnished by the appellant in support of the actual receipt of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the ld. CIT(Appeals) in support of its case that the relevant cash advances having been explained in terms of section 68, the addition made by the Assessing Officer by invoking the said provision was not sustainable. The ld. CIT(Appeals), however, did not find merit in the submission of the assessee and proceeded to confirm the addition made by the Assessing Officer under section 68 for the following reasons given in his impugned order:- (a) The advances were accepted only in cash and only on a few dates. It is evident that in the absence of such advances, the appellant would have been suffering from cash deficits on the respective dates. (b) The appellant has not received any advances from customers for almost the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made before the authorities below on this issue. He also contended that when the advances in question were finally adjusted against the sales subsequently made by the assessee and the sale so made was considered for determining the income offered by the assessee, there was no case to make a separate addition again on account of cash advances treating the same as unexplained cash credit. 5. The ld. D.R., on the other hand, strongly relied on the orders of the authorities below in support of the revenue s case on this issue and read out the relevant adverse findings recorded by the Assessing Officer as well as by the ld. CIT(Appeals) in their respective orders while not accepting the explanation of the assessee in respect of cash advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is not correct. On the other hand, at least two dealers were produced by the assessee for verification before the Assessing Officer and they admitted of having been given the cash advances to the assessee. Having regard to all these facts of this case, I am of the view that all the advances except the advance of Rs.1,20,000/- received by the assessee on 30.03.2009 having been already adjusted against the sales made by the assessee to the concerned Dealers and the sales so made having been duly accounted for by the assessee, the corresponding advances could not be added to the total income of the assessee under section 68 treating the same as unexplained. As regards the advance of Rs.1,20,000/- claimed to be received by the assessee on 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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