TMI Blog2016 (2) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... his business acumen according to which he takes these business decisions. It is not in dispute that M/s J.V. Steel Traders is a regular supplier and advances have been given during the regular course of business. Regular debit and credit entries are appearing in the ledger account. The purchases were made in the earlier as well as subsequent years. These reasons are enough to prove that advance was made out of commercial expediency. - Decided in favour of assessee. - ITA Nos.773 And 774/Chd/2015 - - - Dated:- 11-2-2016 - SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER For The Appellant : Shri Sudhir Sehgal For The Respondent : Shri Manjit Singh, DR ORDER PER RANO JAIN, A.M. : These two appeals filed by the assessee are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-5, Ludhiana, each dated 25.8.2015 for assessment years 2008-09 and 2009 10 respectively. The appeal before the CIT (Appeals) was against the order of the Assessing Officer made under section 143(3) of the Income Tax Act, 1961 (in short the Act ). ITA No.773/Chd/2015 : 2. Briefly, the facts of the case are that durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions, the learned CIT (Appeals) confirmed the addition made by the Assessing Officer. 5. Aggrieved, the assessee has come in appeal before us, raising the following grounds : 1. That the Worthy Commissioner of Income Tax (Appeals) has erred in confirming the addition as made by the Assessing Officer to the tune of ₹ 4,70,913/- u/s 36 (1)(iii) of the income Tax Act, 1961. 2. That the Worthy CIT (A) has also erred in not considering the submissions of the assessee, based on documentary evidences that the amount outstanding towards M/s J.V. Steel Traders was for the business purpose and, as such, no disallowance was called for. 3. That the Worthy CIT (A) has also erred in not considering the judgmentof M/s Bright Enterprises of the Jurisdictional Punjab Haryana High Court in IT No.224 of 2013. 4. That the addition as sustained is against the facts and circumstances of the case. 5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 6. The learned counsel for the assessee submitted before us, referring to the ledger account of M/s J.V. Steel Traders placed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received in the month of January 2007 and no goods were received thereafter. Therefore, the Assessing Officer held that the balance amount cannot be treated as advance for the purpose of purchasing goods but is in the nature of an interest free loan. The AR has submitted that the item being purchased from the said party is very important to the appellant and in order to secure regular supply, certain advance is given. However, the Assessing Officer has rightly observed that the item sold by M/s J.V steel traders is not any unique item which is not available in the market for which the appellant had to pay in advance. Neither has the appellant produced any such evidence nor has he made any such plea. Hence, no justification of the advance is proved and the business purpose for the advance is not made out. The AR has submitted during the appellate proceedings that, at times, advance is given, but that due to non availability of material or due to some other reason i.e rates etc. the material could not be supplied during the year under consideration and therefore the substantial amount was taken back from the party and in subsequent years material was purchased from the party. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h he takes these business decisions. It is not in dispute that M/s J.V. Steel Traders is a regular supplier and advances have been given during the regular course of business. Regular debit and credit entries are appearing in the ledger account. The purchases were made in the earlier as well as subsequent years. These reasons are enough to prove that advance was made out of commercial expediency. Reliance placed by the learned counsel for the assessee on the judgment of Hon'ble Supreme Court in the case of Hero Cycles (supra) is not out of place. 9.1 In view of the above, we direct the Assessing Officer to delete the addition made under section 36(1)(iii) of the Act. ITA No.774/Chd/2015 : 10. The ground Nos.1, 2 and 3 raised by the assessee relate to addition under section 36(1)(iii) of the Act. 11. The issue in these grounds is similar to the issue in grounds Nos.1, 2 and 3 raised by the assessee in ITA No.773/Chd/2015 and the findings given in ITA No.773/Chd/2015 shall apply to this case also with equal force. 12. The ground No.4 raised by the assessee is against the order of the learned CIT (Appeals) in sustaining the disallowance of ₹ 1,26,873/- cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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