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TMI Blog2012 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon order. [A] ITA No.1586/Ahd/2005 2. Ground Nos.1, 5, 6, 7 & 8 are either not pressed or consequential in nature, hence need no independent adjudication. 3. Ground No.2 and sub-grounds are in respect of an addition of Rs.16,50,000/- as cash credits and unaccounted income of the appellant firm. 3.1. The assessee-firm is in the business of trading in electrical goods. From the balance-sheet, it was noted by the AO that the assessee has disclosed 'advances from customers". The AO has enquired about the genuineness of the transaction. The AO has noted the names of eleven parties and the respective amounts which were claimed by the assessee as an amount received in advance in cash. The AO has made a chart giving the names and addresses o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished a copy of the Certificate issued by the Sarpanch of the Village as an evidence. Some of the parties have been refunded through bearer cheque and the cheque was encashed by withdrawing form the Bank. It was also explained that most of the parties were villagers and, therefore, they have deposited the cash as an advance against the supply of the water pump. However, the AO was not convinced and held that the assessee has not discharged the onus of proving the genuineness of the creditors. Provisions of section 68 of the IT Act were invoked and the addition was made. 4. Before the ld.CIT(A), facts were reiterated as under:- "4.2. Before me the appellant maintained that it had not been given sufficient opportunity to submit confirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant's back; the AO had ignored relevant statements and documents provided by the app without commenting on their genuineness and that additions made by the AO had been made mechanically without exercising discretion. At the same time the appellant also expressed it's inability to produce the parties for cross verification." 4.1. The Ld.CIT(A) was of the view that the assessee has failed to discharge its primary onus and since the assessee has received huge cash in lump sum from the persons who were not visible, hence failed to establish the genuineness of the transaction. The action of the AO was upheld. 5. With this brief factual background, we have heard both the sides. As far as the objection of the Revenue at the time of hearing is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished the bills issued in the names of those parties and informed that in the subsequent assessment year, i.e. A.Y. 2002-03 sales were made to the tune of Rs.49,03,203/- for the period ending 31.03.2002 and those sales were inclusive of the sales made to the said parties. He has argued that the enquiry was not properly conducted and that one-sided enquiry was made the reason of doubting those parties. Once the Sarpanch of the Village has confirmed the existence of those villagers, then there was no occasion to doubt existence of those parties. 7. We have considered the totality of the facts and circumstances of the case. The assessee-firm is admittedly in the business of trading of electrical goods. Facts of the case have revealed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Sarpanch of the Gram Panchayat has confirmed the presence and the living of those persons in the village. From these facts, it is therefore apparent that there were conflicting claims of both the sides. On one hand, the Revenue has alleged that those persons were not found living in the village, however, on the other hand, on the basis of the evidences and the certificate the assessee has vehemently contested that those villagers were very much living in the village. An another fallacy, as observed by us, is that neither the Inspector nor any other person was confronted to the assessee and the assessee has not been asked to cross-examine those evidences or witnesses which means that it was rightly argued that a one sided enquiry was condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect needs due consideration was that the Assessing Officer had not doubted the purchases of the pumps, stated to be by account payee cheques and, thereafter, the corresponding sales being made on which both sales-tax and income-tax had already been paid. We therefore hold that the AO was not justified in adding the impugned amount as the taxable income of the assessee for the year under consideration. We hereby direct to delete the addition. In the result, ground is allowed. 8. Ground Nos.3 & 4 read as under: 3. The learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs.26854 being expenses on travelling considering that the expenditure was by self made vouchers and supportive proofs. 4. That the learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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