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TMI Blog2019 (5) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... enue's Appeals and upheld the order passed by the learned Commissioner of Income Tax (Appeals) dated 8.5.2017 for the Assessment Year 2014-2015. 2. The suggested substantial questions of law are quoted below for ready reference:- "i) Whether the ITAT is right in deleting the addition made under Section 68 of the Income tax Act when the assessee could not explain the advance received from M/s.Kannan Enterprises, Kollam? ii) Whether the ITAT is right in law in upholding the order of the CIT (A) who admitted return of income of the creditor M/s.Kannan Enterprises, Kollam, which was not produced before the Assessing Officer, as additional evidence without giving an opportunity to the Assessing Officer as per rule 46A of the IT Rules? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016. It was claimed in the above letter that for the purpose of availing loans from financial institutions, the appellant required more capital and, therefore, in order to enhance the credit limit, the appellant accounted the purchase advance received from M/s.Kannan Enterprises, kollam in the capital account. It was also submitted that whenever raw nuts are supplied to M/s.Kannan Enterprises, Kollam, the same would be adjusted and it would be debited to capital account. He further submitted that the Assessing Officer had issued letter under Section 133(6) dated 2.12.2016 to M/s.Kannan Enterprises, Kollam in response to the same M/s.Kannan Enterprises, Kollam filed a letter dated 8.12.2016 in which it was confirmed by them that they had g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of Cashewnuts from the Assessees and such amounts tallied with the credit entires made by the Assessee. The relevant observation of the Commissioner of Income Tax (Appeals) in Para 3.3.1 of the order is also quoted below for ready reference:- "3.3.1. From the above, it is seen that the Assessing Officer has conducted due verification with creditor, who had confirmed the same alongwith his permanent account number and the fact that he was assessed to tax. It is further seen that the dates of credit of various amounts in the capital account of the appellant tally exactly with dates of payments as per the ledger account of the appellant given by M/s.Kannan Enterprises in his books of accounts as per letter dated 8.12.2016. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not justified and the same is deleted. The representative submitted a copy of income tax return of M/s.Kannan Enterprises, Kollam as per which the amount of advance given to the appellant is getting duly reflected. This return of income is taken as supporting evidence and on the basis of the same it is found that the creditor had availed bank loan which was utilised for the purpose of giving advance to the appellant. Even without the above supporting evidence, I find that there was no justification for adding credit as the creditor had confirmed the same and also furnished his permanent account number on which the Assessing Officer did not conduct further enquiry and prove that the amount advanced to the appellant did not appear in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue." 8. The learned counsel for the Revenue/appellant submitted that the Ledger Accounts of the Assessees concerned were not produced before the Assessing Authority nor the said creditor viz., Proprietor of M/s.Kannan Enterprises, Kollam was produced before the Assessing Authority and only a letter dated 8.12.2016, in pursuance of the notice issued to the Assessees, was produced before the Assessing Authority. He submitted that if any additional evidence was produced before the learned Appellate Authority, Rule 46A of the Income Tax Rules 1962 requires the matter to be remanded back to the Assessing Authority to appreciate that evidence. 9. Having heard the learned counsel for the Revenue, we are satisfied that the two Appellate Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellate Authority have the power of Civil Court under Section 131 of the Act including the power to enforce attendance of the witnesses and the parties. If a half-hearted enquiry was made by the Assessing Authority and additions were made as unexplained cash credits under Section 68 of the Act and such finding of facts were reversed by the Appellate Authority, it would not give rise to any substantial question of law for our consideration under Section 260A of the Act. The two Appellate Authorities have concurrently held that those credit entires represented Trade Advances for purchase of goods and section 46A of the Rules does not apply in the present case. Therefore, we are of the considered opinion that these findings of facts canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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