9911796707
TMI Blog2015 (10) TMI 2181X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CIT(A) sustaining the addition made by AO being the advances received from customers who booked vehicle for purchase and consequently the advances were also adjusted against sale of vehicle. For this, assessee has raised following ground no.1: "1. That considering the facts and circumstances of the case and the law the Commissioner of Income Tax (Appeals), Durgapur has erred in sustaining the addition of Rs. 3,99,54,051/- being advances received from customers who booked for purchase of Hero Honda Motor Cycles from the assessee and which advances are adjusted while raising tax invoice at the time of sale of vehicles." 3. Briefly stated facts are that the assessee company is a dealer in motor cycle of Hero Honda Motor Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elivery of two wheelers they issue invoice to the customers and take back the money receipts of advance payments and adjust the advance against sale price of two wheelers. But the AO has not believed the explanation of the assessee and added the entire advance received from customers at Rs. 3,99,54,051/-. Aggrieved, assessee preferred appeal before CIT(A), who confirmed the action of AO by applying the provision of section 68 of the Act by giving the following final finding at para 7 as under: "7. Therefore taking into consideration the circumstances of the present case and the applicable legal position on the issue, it can be safely concluded that the A.O. was correct in law in resorting to the addition of Rs. 3,99,54,051/- by applying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l invoice price. According to assessee, such advances are mainly remained unadjusted for last 2/3 months round the year and accordingly, in the relevant financial year 2009-10 relevant to AY 2010-11, the balance as on 31.03.2010 was Rs. 3,99,54,051/-, which is the subject matter of present appeal as added by AO and confirmed by CIT(A). According to assessee, the advance was received by the assessee against booking of a particular make of motor cycle, which is not immediately available. As and when the same is received from Hero Motor Corporation Ltd. the same is delivered to customers after adjusting advance against full invoice price. The AO called for details viz., (a) Name & full postal addresses of the person from whom advance was taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive chart is only compilation of sales and purchases as well the advances. It was explained that name of the customers with relevant receipt no. issued on receiving advance and amount of advance receipt were given. Even the addresses of customers therein relevant tax/sales invoices, which were produced before the AO as well as before CIT(A), contains full names, addresses, chassis and engine no. and total price of motor cycles sold under said invoice including the advance adjusted which was received from the customers. According to Ld. Counsel for the assessee, this is general practice in the trade where the demand is high and goods are in short supply and in such scenario, assessee is receiving money against future sales. Ld. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no. of the two wheeler, engine no. and total price of two wheeler including the adjustment of advance received from the party. The assessee is consistently following this practice and he has filed the details at page 213 of assessee's paper book and the relevant details reads as under: Dutta Automobiles Pvt. Ltd. Comparative Chart of Customers Advance from Asst. Year 2008-09 to 2012-13 AY 2008-09 (Rs.) AY 2009-10 (Rs.) AY 2010-11 (Rs.) AY 2011-12 (Rs.) AY 2012-13 (Rs.) Sales as per Audited P&L Account (Only motor cycle) 125485126 271650526 328049281 423061933 449828281 Advance from customers (i) Opening Balance 0 3051540 23473175 39954051 31735984 (ii)Received during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsistently following certain system of accounting which had been accepted by the department from the very beginning and even in future years. There is no change of system of accounting followed by the assessee. Allowing the department to adopt a different approach altogether in this assessment year in question would create an anomalous situation as far as the assessee is concerned. The issue that the dealer receiving advance money from customers where the item is in demand and there is scarcity of supply, it many a times happen that seller receives advance money from the purchaser and as and when supply is made the advance is adjusted against sale price. This is being done by the present assessee before us also. The advance money, in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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