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2019 (8) TMI 644 - AT - Income TaxAddition u/s 68 - advance received from the customers and corresponding deposits in the bank account - assessee started new dealership of Ford car and received amount in cash from the prospective buyers/customers which was adjusted at the time of sales - HELD THAT:- We are in agreement with the contention of assessee that at the time of inauguration of new business, some customers shows their intention to buy products, which was car in the present case and prospective buyers give advance to the new entrepreneurs not only for the purpose of purchasing car but also to support in the new venture. The amount so received as advance against sale of car cannot be treated as cash credit in the hands of the assessee and the AO is not empowered and entitled to trigger any action against the assessee with the support of section 68 Assessee has submitted all details regarding advance received from the buyers/customers in the form of receipts, invoices, PAN and other identity proof establishing identity, existence of the advance providers. So far as creditworthiness is concerned, it cannot be accepted from a seller to examine the creditworthiness of the buyers prior to selling any goods to any persons. AO is equipped with the full powers under his command as per provisions of the Act to call respective persons to examine the source of cash deposit by them to the assessee but in such a situation when the advance providers does not turn up and come forward to appear before the AO, then also the assessee cannot be blamed as the AO possesses all the details of customers, who had advanced the month in the form of identity, PAN and other ID proof. Thus the amount treated by the AO as cash credit is nothing but the advance amount given by the customers for purchase of vehicles from the assessee, which has been finally adjusted at the time of delivery of the vehicles. Therefore, this amount cannot be treated as unexplained cash credit in the hands of the assessee u/s 68 - Decided in favour of assessee.
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