Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2019 (10) TMI 294

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssee. As observed from the order of the CIT(A), the AO did not make any effort also during the remand stage. Once the assessee furnished the complete details of ledger accounts, customer details, vouchers and bills and completion certificates of the lifts, the burden of the assessee gets discharged and it is for the AO to make necessary enquiries and to prove the genuineness or otherwise. In the instant case, inspite of the fact that the books of accounts, bills, vouchers, details and the completion certificates are available, the AO did not find any defect in the details furnished by the assessee. Since the assessee has affected the sales and adjusted the sale advances in the subsequent years, there is no reason to suspect the genuineness of the trade creditors, hence, there is no case for making the addition. - Decided in favour of assessee Addition u/s 41(1) - HELD THAT:- AO did not make any addition u/s 41(1) of the Act. There is no dispute that the sum of ₹ 4,98,69,526/- was not related to the assessment year under consideration and the AO made the addition u/s 68 of the Act. AO is not permitted to make addition of opening balances u/s 68 of the Act. Though the r .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... advances from customers ₹ 4,98,69,526/- and creditors for advances for an amount of ₹ 1,80,60,116/- aggregating to ₹ 6,79,29,642, treated the same as not genuine and accordingly made addition of ₹ 6,79,29,642/- as unexplained income in the hands of the assessee. 4. Against the order of the AO, the assessee went on appeal before the CIT(A) and filed the written submissions before the CIT(A). The Ld.CIT(A) called for the remand report from the AO and the AO has submitted the remand report after duly considering the details submitted by the assessee in the remand proceedings. On being considered the written submissions of the assessee as well as the remand report of the AO, the Ld.CIT(A) dealt with the issue under the following two sub-heads. (a) Advances from Customers ₹ 4,98,69,526/- (b) Creditors for advances ₹ 1,80,60,116/- 4.1. Ld.CIT(A) found that the assessee has produced the copies of bank accounts, wherein, the advan .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... f the total advances received from the customers amounting to ₹ 4,98,69,526/- forming part of the aggregate addition of ₹ 6,79,29,642/-. During the appeal hearing, supporting the ground raised by the department in grounds of appeal, the Ld.DR argued that it is evident from the order of the Ld.CIT(A) that the assessee has accepted the advances of ₹ 5,37,236/- during the previous year relevant to the A.Y. 2012-13. Since the assessee failed to submit the required details to establish the identity and credit worthiness of the creditors, the Ld.CIT(A) ought to have upheld the addition of ₹ 5,37,236/- instead of deleting the entire addition. Therefore, the Ld.DR requested to set aside the order of the Ld.CIT(A) and confirm the addition of ₹ 5,37,236/- out of the customer advances of ₹ 4,98,69,526/-. 9. On the other hand, the Ld.AR fairly conceded for confirming the addition of ₹ 5,37,236/-. 10. We have heard both the parties and perused the material placed on record. Out of the customer advances of ₹ 4,98,69,526/-, advances accepted by the assessee during the relevant assessment year under consideration was .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... that the assessee has produced the books of accounts, bank accounts, past years return of income with audit report etc. for verification. On verification, the AO found that the contentions of the assessee with regard to opening balance, reclassification of advances from customers, sundry debtors and regular sales are supported by the books of accounts. The AO also accepted in the remand report that the advances were received by the assessee, through banking channels during the relevant assessment year and were in the nature of trade credits and not cash credits. The trade advances were subsequently offered as income in the relevant previous year of sale transaction of lifts. The assessee also produced party- wise copies of completion of work certificates issued by the assessee company in which cases, the assessee has completed the work of creation of lifts in the subsequent years along with respective ledger account copy. Returns of income filed by the assessee in subsequent assessment years confirmed the contention of the assessee. All the credits were adjusted towards sales are trade credits and not cash credits. The Ld.CIT(A) further observed that the assessee has furnished the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 8377; 1,80,60,116/- is, in my view, not justified in the absence of any evidence contrary to the claim of appellant. 12. Against the order of the Ld.CIT(A), the department has filed appeal before this Tribunal. During the appeal hearing, the Ld.DR strongly supported the order of the AO stating that though the transaction was through banking channel it is obligation of the assessee to provide sufficient evidences to establish genuineness, identity and credit worthiness of the credits which the assessee failed to discharge during the assessment proceedings, as well as during the remand proceedings. Therefore requested to uphold the order of the AO and set aside the order of the Ld.CIT(A). 13. On the other hand, the Ld.AR submitted that the assessee has produced the books of accounts, bills and vouchers during the assessment proceedings which contain the details of advances received with clear address of the customers etc. Therefore, there is no failure on the part of the assessee during the assessment proceedings in the submission of the details. The Ld.AR further invited our attention to page No.4 and 5 of the paper book, wherein .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the Ld.CIT(A), the AO did not make any effort also during the remand stage. Once the assessee furnished the complete details of ledger accounts, customer details, vouchers and bills and completion certificates of the lifts, the burden of the assessee gets discharged and it is for the AO to make necessary enquiries and to prove the genuineness or otherwise. In the instant case, inspite of the fact that the books of accounts, bills, vouchers, details and the completion certificates are available, the AO did not find any defect in the details furnished by the assessee. Since the assessee has affected the sales and adjusted the sale advances in the subsequent years, there is no reason to suspect the genuineness of the trade creditors, hence, there is no case for making the addition. Accordingly, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue is dismissed on this ground. 15. Ground No.4 is related to the alternate ground of the department to consider the addition u/s 41(1) of the Act. During the appeal hearing, the Ld.DR submitted that even though the Ld.CIT(A) found that the sum .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates