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TMI Blog2018 (10) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter referred to as the "Act") out of customer's Advances received against booking of motor cycles. 3. Brief facts of the case are that the assessee is a dealer in motor cycle of M/s. Hero Motor Corp Ltd. and also trading in spare parts and resale of two wheelers. The assessee during the course of assessment proceedings produced complete books of account and other supporting vouchers including sale and purchase bills and evidence regarding expenses. The AO examined the books of account and on perusal of audited Balance Sheet observed that the assessee had declared the liability of Rs. 3,69,74,806/- being 'advances from customers'. The AO required the assessee to file the details of customers from whom advances were shown to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is in appeal before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that assessee is a dealer in motor cycle of M/s Hero Motor Corp Ltd. and also trade in spare parts and resale of two wheelers. The AO disallowed Rs. 60,00,000/- out of Rs. 3,69,74,806/- claimed by the assessee as liability under the head 'advance from customers' u/s. 68 of the Act. On appeal, the Ld. CIT(A) confirmed the action of AO. At the time of hearing before us, the Ld. AR of the assessee brought to our notice that the books of account duly audited by assessee has not been rejected by the AO and the AO has made the ad hoc disallowance u/s. 68 of the Act, which is arbitrary exercise of power and has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed in the return of income i.e. the trading account of the assessee. Accordingly, we find no ambiguity in the system followed by the assessee. From the details filed before us, Ld. DR could not point out the discrepancy in the same because these advances were adjusted against sales. When this was pointed out to Ld. Sr. DR, he stated that the assessee is unable to produce the PANs, names and addresses of the parties. He was specifically shown a tax/retail invoice wherein complete details were given except the PAN/Voter I Card. In our view, PAN/Voter Identity Card is a KYC norm, which does not apply to the sale of goods under the Sale of Goods Act. In view of the above, we are of the view that the AO and CIT(A) both have erred in maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Tribunal as also before the Assessing Officer and the CIT(A). The Assessing Officer and the CIT(A) chose to draw an inference unfavourable to the assessee because they insisted upon records which are not legally required. It was not required by law that before taking advance from the customers of motor cycles, the assessee should have obtained their PAN Card number. The assessee has taken advance against proper receipt and the amount taken by way of advance has been adjusted at the time of giving delivery of the motor cycles as regards which full particulars were furnished. Mrs. Das De, learned advocate appearing for the appellant/revenue, took time to go through the paper book filed by Mr. Khaitan. Thereafter when the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus liability being created was there as held by the Assessing Officer. In that view of the matter, we are of the opinion that the finding arrived at by the learned Tribunal is not perverse. Section 68 in the facts of the case had no applicability. The question is, thus, answered in favour of the assessee." 7. In the light of the aforesaid order of the Hon'ble High Court confirming the order of the Tribunal in the case of the assessee itself on similar facts and circumstances of the case, the action of the Ld. CIT(A) cannot be sustained. We also note that in this case, the claim of the assessee is Rs. 3,69,74,806/- whereas the AO has disbelieved Rs. 60,00,000/- which is an ad hoc disallowance without rejecting the audited books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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