The ITO, Ward-1, Bharuch V. M/s. Agro Sales corporation, Bharuch

ITA 2294/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2019 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 02-11-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: KETAN H SHAH
• Keywords: Unexplained cash credit; Gift; Business income; Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2294/AHD/2006 ASSESSMENT YEAR:2000-01 DATE OF HEARING:17.12.09 DRAF TED:22.12.09 INCOME TAX OFFICER, WARD-1, 1 ST FLOOR, BANK OF BARODA BUILDING, STATION ROAD, BHARUCH V/S. M/S. AGRO SALES CORPORATION, PRITHVI TRADE CENTRE, STATION ROAD, BHARUCH-392 001 PAN NO.AADFA2823J (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI C.K.MISHRA, SR. DR RESPONDENT BY:- SHRI KETAN H SHAH, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-XIX, AHMEDABAD IN APPEAL NO. CI T(A)-XIX/CAB/VI-162/05-06 DATED 14-08-2006. THE ASSESSMENT WAS FRAMED BY THE INCOME TAX OFFICER, WARD-1, BHARUCH U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 27-03-2003 FOR THE ASSESSMENT YEAR 2000-01. 2. THE FIRST ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.54,910/- BEING UNEXPLAI NED CASH FOUND DURING THE COURSE OF SURVEY ON THE GROUND THAT TELESCOPING BENEFIT HA S TO BE GIVEN AGAINST ADDITION MADE ON ACCOUNT OF SHORTAGE OF STOCK AND UNACCOUNTE D SALES. FOR THIS, THE REVENUE HAS RAISED THE FOLLOWING GROUND NO.1 :- ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A), AHMEDABAD HAS ERRED IN DELETING THE ADDITION OF RS.54,910/- B EING UNEXPLAINED CASH FOUND DURING THE SURVEY ON THE GROUND THAT TELESCOP ING BENEFIT HAS TO BE GIVEN AGAINST ADDITION MADE ON ACCOUNT OF SHORTAGE OF STO CK AND UNACCOUNTED SALES, WHEREAS THERE WAS NO EVIDENCE TO ESTABLISH A NY NEXUS BETWEEN THE TWO. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF CIT(A). T HE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT DURING THE COURSE OF SURVEY TH E CASH FOUND WAS AT RS.91,400/-. ACCORDING TO THE ASSESSING OFFICER THE REGULAR CASH BOOK WAS NOT WRITTEN UP TO THE DATE OF SURVEY I.E. 18-01-2000. ACCORDING TO HIM, A S STATED BY THE ASSESSING OFFICER THAT THE ROUGH CASH BOOK WAS WRITTEN FOR THE PERIOD 02-08-1999 TO 10-12-1999 AND WRITTEN FROM 13-1-1999 TO 18-01-2000 AS PER THIS CA SH BOOK BALANCE OF M/S. AGRO SALES CORPORATION WAS RS.36,490/-. ACCORDING TO THE ASSESSING OFFICER THE DIFFERENCE IN CASH BOOK WAS OF EXCESS CASH FOUND AT RS.54,910/- AND THE RELEVANT FINDING OF THE ASSESSING OFFICER READS AS UNDER:- THE DIFFERENCE IN CASH ON HAND ON DATE OF SURVEY C ASH FOUND WAS AS UNDER: (1) H.O. AGRO SALES CORP. OF RS.85900/- (2) BRANCH AT JAMBUSAR ROAD-BHARUCH RS. 5500/- A) AS PER ROUGH CASH BOOK THE OPENING B/S WAS RS.36 940/- HOWEVER AS PER THE ROUGH CASH BOOK SEIZED BY YOU THE FOLLOWING ADD ITION HAVE BEEN SHOWN THERE AGAINST. B) THE PAYMENT RECEIVE FROM DOLLA TRADERS RS.23010/ - C) PAYMENT RECEIVE FROM PATEL TRADERS BHARUCH RS. 4000/- D) BRANCH CASH RS.7000/- E) PAYMENT RECEIVE FROM NARENDRA CHUNILAL RS.10000/ - TOTAL RS.80500/- THUS THERE IS DIFFERENCE OF RS.11000/- ON C ASH A/C. THE CONTENTION OF THE ASSESSEE IS NOT ACCEPT ABLE AS ON THE DAY OF SURVEY THE BALANCE BROUGHT FORWARD IS RS.36,940/- AND ON T HE DAY OF SURVEY THE BUSINESS TRANSACTION WERE SUSPENDED HENCE THE CONTE NTION OF THE ASSESSEE THAT PAYMENTS HAVE BEEN IS NOT ACCEPTED. HENCE THE EXCESS CASH FOUND OF RS.54,910/- IS ADDED TO THE TOTAL INCOME. ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 3 4. BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT SU RVEY PARTY HAS NOT CONSIDERED THE CASH AS PER BRANCH CASH BOOK WHICH W AS HAVING CASH BALANCE AT RS.7,000/- AND THE TOTAL CASH AS PER CASH BOOK OF B OTH HEADQUARTERS AND BRANCH OFFICE WAS ABOVE RS.80,520/- AND THUS THERE WAS DIF FERENCE OF ONLY RS.15,900/-. ALTERNATIVELY THE ASSESSEE CONTENDED THAT THE UNACC OUNTED SALES OF RS.48,214/- ON ACCOUNT OF FERTILIZERS, SEEDS AND PESTICIDES ADMITT ED BY THE ASSESSEE SHOULD HAVE BEEN GIVEN THE TELESCOPING BENEFIT AND THE SAME SHO ULD HAVE BEEN ALLOWED. THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE BY GIVING FIND ING IN PARA-5.3 OF HIS APPELLATE ORDER:- 5.3 I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMIS SION OF THE APPELLANT. I HAVE GONE THROUGH THE ASSESSMENT ORDER. THE RECONCILIATI ON STATEMENT OF CASH GIVEN BY THE APPELLANT IS AFTER THOUGHT AND NOT SUP PORTED BY ANY DOCUMENTARY EVIDENCE, HENCE THE ACTION OF THE ASSESSING OFFICER IS FOUND TO BE CORRECT. HOWEVER, HE IS DIRECTED TO ALLOW TELESCOPING FOR AD DITION MADE FOR SHORTAGE OF STOCK OF SPARE PARTS WHICH IS TREATED AS UNACCOUNTE D SALES AND THE SAME HAS BEEN CONFIRMED BY ME IN EARLIER PARA. REMAINING EXC ESS CASH WILL COVER ADMITTED UNACCOUNTED SALES OF FERTILIZERS AND PESTI CIDES. IN VIEW OF THIS, THERE IS NO NEED TO MAKE SEPARATE ADDITION FOR EXCESS CAS H FOUND DURING THE COURSE OF SURVEY. THEREFORE THE ASSESSING OFFICER IS DIREC TED TO DELETE THE ADDITION MADE FOR UNEXPLAINED EXCESS CASH. 5. WE FIND THAT THE CIT(A) HAS REASONABLY ALLOWED T HE CLAIM OF THE ASSESSEE AS THERE WAS ONLY DIFFERENCE OF RS.10,900/- AND HE ALS O ALLOWED THE TELESCOPING BENEFIT ON UNACCOUNTED SALES ADMITTED BY THE ASSESSEE AT RS .48,14/- ON ACCOUNT OF SALE OF FERTILIZERS, SEEDS AND PESTICIDES. WE FIND NO INFI RMITY IN THE ORDER OF CIT(A) AND WE CONFIRM THE ORDER OF CIT(A). THIS ISSUE OF THE REV ENUES APPEAL IS DISMISSED. 6. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IN DELE TING THE ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWANCE COMMISSION PAYMEN T MADE TO SISTER CONCERN U/S.40A(2)(B) OF THE ACT. FOR THIS, THE REVENUE HA S RAISED THE FOLLOWING GROUND NO.2 :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A), AHMEDABAD HAS ERRED IN DELETING ADDITION MADE U/S.40A(2)(B) O F RS.7,54,843/- BEING EXCESS PAYMENT OF COMMISSION TO SISTER CONCERNS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESSMENT ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 4 PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASS ESSEE HAS RECEIVED CREDIT NOTES OF RS.11,74,683/- ON TOTAL PURCHASES OF RS.1,64,32, 021/- FROM M/S. NOVARTIES INDIA LTD. AND FURTHER THE ASSESSEE HAD ISSUED PROPORTION ATE CREDIT NOTES TO ITS ASSOCIATE CONCERNS WHOM THE ASSESSEE SOLD GOODS OF RS.1,79,03 ,043/-. ON VERIFICATION, THE AO FOUND THAT CREDIT NOTES ISSUED TO ITS ASSOCIATE CONCERNS ARE NOT IN PROPORTIONATE TO SALES MADE TO THE ASSESSEE. THE AO HAS MENTIONED THAT THE ASSESSEE HAS ATTEMPTED TO DIVERT ITS PROFIT TO THE ASSOCIATE CON CERNS BY ISSUING CREDIT NOTES. THE AO FURTHER FOUND THAT THE ASSESSEE HAS MADE SALES T O M/S. AGRO AGENCY OF RS.1,29,51,875/- AND ISSUED CREDIT NOTES 16% WHICH IS CONSIDERED REASONABLE. THUS, EXCESS COMMISSION ABOVE 16% ALLOWED TO M/S. A GRO SERVICES CENTRE AND GUJARAT FERTILIZER CORPORATION AMOUNTING TO RS.7,59 ,843/- IS DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. AG GRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE ALLOWED THE CLAIM OF THE ASSESSEE VIDE PARA-6.2 OF HIS APPELLATE ORDER AS UNDER:- 6.2 THE CONTENTION OF THE APPELLANT HAS BEEN CAREF ULLY CONSIDERED. THE FACTS BROUGHT ON RECORD IN THE ASSESSMENT ORDER HAVE BEEN CONSIDERED. SECTION 40A(2) SAYS THAT ANY EXPENDITURE BY WAY OF PAYMENT TO THE PERSONS SPECIFIED IN SUB-CLAUSE 2(B) IS LIABLE TO BE DISALLOWED IN CO MPUTING BUSINESS INCOME TO THE EXTENT SUCH EXPENDITURE IS IN THE OPINION OF TH E ASSESSING OFFICER TO BE EXCESSIVE OR UNREASONABLE HAVING REGARD TO THE FARE MARKET VALUE OF GOODS, SERVICE OR FACILITIES. THUS, SECTION 40A(2) DOES NO T HAVE ANY APPLICATION, UNLESS IT IS FIRST HELD THAT THE EXPENDITURE WAS EX CESSIVE AND UNREASONABLE. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS DISALLO WED COMMISSION IN EXCESS 16% ON SALES EFFECTED TO THE ASSOCIATE CONCERNS. TH E ASSESSING OFFICER HAS JUMPED ON CONCLUSION THAT THE APPELLATE HAS PAID DI SPROPORTIONATE COMMISSION / DISCOUNT TO ITS ASSOCIATE CONCERNS WHI LE THE APPELLATE HAS SUBMITTED THAT IT HAD RECEIVE PRODUCT INCENTIVES, G IFT ARTICLES REIMBURSEMENT, CASH DISCOUNTS ETC. THE PRODUCT INCENTIVE GIFT ARTI CLES AND GOODS RETURNED CREDITS HAVE BEEN PASSED ON TO ITS ASSOCIATE CONCER NS WHOM IT HAS SOLD GOODS OF M/S. NOVARTIS INDIA LTD. WHILE CASH DISCOU NTS HAS BEEN ALLOWED TO THE CONCERNS WHO AVAILED THE BENEFIT OF MAKING EARL Y PAYMENT. THE AAO FAILED TO APPRECIATE THESE FACTS. THE CONTENTION OF THE APPELLATE IS FOUND TO BE CORRECT. APPARENTLY, THE ASSESSING OFFICER COULD NO T MAKE OUT A PROPER CASE FOR INVOKING THE PROVISION OF SECTION 40A(2) OF THE INCOME TAX ACT. HE FAILED TO VERIFY THE NATURE OF COMMISSION / DISCOUNT ALLOWED. DISALLOWANCE HAS BEEN MADE WITHOUT VERIFYING THE ACTUAL FACTS AND NATURE OF EXPENSES. CONSIDERING THE FACTS OF THE PRESENT CASE, DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THE BASIS OF SALES IS NOT FOUND TO BE CORRECT IN TH E EYES OF LAW. CASH DISCOUNT ALLOWED ON EARLY PAYMENT CANNOT BE DISALLOWED ON TH E BASIS OF SALES EFFECTED. THEREFORE, DISALLOWANCE MAD IS NOT FOUND TO BE CORR ECT IN THE EYES OF LAW AND ACCORDINGLY THE SAME IS DELETED. THE APPELLANT GETS RELIEF OF RS.7,59,843/- ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 5 8. WE FIND THAT THE CIT(A) HAS CONSIDERED THE PRODU CT AND INCENTIVE GIFT ARTICLES AND GOODS RETURNED CREDITS PASSED BY THE ASSESSEE T O ITS ASSOCIATE CONCERN TO WHOM IT HAS SOLD GOODS TO M/S. NOVARTIS INDIA LTD. AND ALSO CASH DISCOUNT HAVE BEEN ALLOWED TO THE CONCERNS, WHO AVAILED THE BENEFIT OF MAKING EARLY PAYMENTS AND NOTED THAT THE PROVISIONS OF SECTION 40A(2)(B) WILL NOT BE APPLICABLE IN SUCH CASES. THE CIT(A) STATED THAT THE ASSESSING OFFICER HAS FA ILED TO APPRECIATE THIS FACT AND THE CONTENTION OF THE ASSESSEE IS CORRECT. IN VIEW OF T HE FACT THAT VERY NATURE OF COMMISSION AND DISCOUNT ALLOWED BY THE ASSESSEE HAS NOT BEEN VERIFIED AND DISALLOWANCE HAS BEEN MADE WITHOUT VERIFYING THE FA CTS AND NATURE OF FACTS OF THE CASE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE CIT (A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THIS ISSUE OF THE REVENUE S APPEAL IS DISMISSED. 9. THE NEXT ISSUE IN THIS APPEAL OF THE REVENUE IS AS REGARDS TO THE DELETION OF ADDITION OF RS.10,57,185/-BEING PEAK CREDITS OF ADV ANCES RAISED BY THE ASSESSEE FROM FARMERS. FOR THIS, THE REVENUE HAS RAISED THE FOLLOWING GROUND NO.3 :- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A), AHMEDABAD HAS ERRED IN DELETING THE ADDITION OF RS.10,57,185/ - BEING PEAK CREDITS OF ADVANCES RAISED BY THE ASSESSEE FRO FARMERS. 10. AFTER HEARING RIVAL CONTENTIONS AND GOING THROU GH THE CASE RECORDS WE FIND THAT THE ASSESSING OFFICER ON VERIFICATION OF BOOKS OF ACCOUNT FOUND THAT THE ASSESSEE HAD EFFECTED CASH SALES AMOUNTING TO RS.27 ,48,079/- AGAINST THE ADVANCE RECEIVED FROM THE FARMERS. IT WAS FOUND FROM THE SA LE REGISTER THAT BILL BOOK USED FOR CASH SALES WAS HAVING DIFFERENT SERIES NUMBER FROM THE BILL BOOK USED FOR REGULAR DAY-TO-DAY SALES. THE ASSESSING OFFICER OBSERVED TH AT ADVANCES FROM FARMERS WERE SHOWN AS RECEIVED FROM APRIL99 TO SEPTEMPER99 WHI LE SALES WERE MADE FROM OCTOBER99 TO JANUARY00 BUT THE AO ALSO FOUND THAT NO RECEIPTS WERE ISSUED BY THE ASSESSEE AGAINST ADVANCES RECEIVED FROM FARMERS. H E ALSO FOUND THAT IN CASH MEMO BILL NO CREDIT FOR ADVANCE WAS MENTIONED. THE SURVEY ACTION REVEALED THAT THE OPENING AND CLOSING BALANCE WAS NOT DRAWN IN THE CA SH BOOK. IN VIEW OF THE THESE FACTS, THE AO DRAWN CONCLUSION THAT THE ASSESSEE HA S WELL PLANNED TO INDULGE IN MAL-PRACTICE AND THE ASSESSEE HAS WRITTEN CASH BOOK AFTER SURVEY AND ENTERED CASH SALES WHICH HAS NOT IN FACT TAKEN PLACE AND THE ENT RIES OF CASH SALES WRITTEN IN BILL BOOK NO.2 IS ENTERED IN THE CASH BOOK. AS SUCH, TH E FIRM HAS INTRODUCED ITS OWN ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 6 UNACCOUNTED CASH OF RS.27,48,079/- IN THE BOOKS OF ACCOUNT. THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT FOUND SATISFACTORY. THE AO WORKED OUT PEAK OF ALLEGED ADVANCES RECEIVED FROM FARMER AND THE PEAK AMOUNT O F RS.10,57,185/- HAS BEEN ADDED AS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT . AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CIT(A) DELETED T HE ADDITION BY GIVING FOLLOWING FINDING IN PARA-8.2 OF HIS APPELLATE ORDER:- 8.2 THE CONTENTION OF THE APPELLANT HAS BEEN CAREF ULLY CONSIDERED AND PERUSED THE CASE LAWS RELIED UPON. THE FACTS BROUGH T ON RECORD IN THE ASSESSMENT ORDER ON THIS ISSUE HAVE BEEN CONSIDERED . I HAVE ALSO CONSIDERED THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICE R. IT IS A FACT THAT CASH SALES OF RS.27,48,079/- HAVE BEEN RECORDED IN THE R EGULAR BOOKS OF ACCOUNT AFTER THE SURVEY ACTION. THESE FACTS HAVE NOT BEEN DISPUTED BY THE APPELLANT. IT IS ALSO A FACT THAT THESE CASH SALES HAVE BEEN E FFECTED AGAINST THE ADVANCES RECEIVED FROM FARMERS. THE AUTHORIZED REPRESENTATIV E HAS CONTENDED THAT ON ONE HAND THE ASSESSING OFFICER HAS ACCEPTED SAID CA SH SALES WHILE COMPUTING THE TOTAL INCOME IN THE ASSESSMENT ORDER AND NO OTHER HAND THE ADVANCES AGAINST WHICH CASH SALES MADE, HAVE BEEN T REATED AS UNEXPLAINED AND MADE ADDITION ON PEAK BASIS U/S.68 OF HE INCOME TAX ACT. THIS ACTION OF THE ASSESSING OFFICER IS CONTRADICTORY AND RESULTED IN DOUBLE TAXATION. THIS CONTENTION CARRIES WEIGH. THE CASH SALES SHOWN AGAI NST ADVANCES HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. THEREFORE, ADVER SE INFERENCE DRAWN BY THE ASSESSING OFFICER IN RESPECT OF ADVANCES APPEARS TO BE NOT CORRECT IN THE EYES OF LAW. FURTHER, IT IS BROUGHT TO MY NOTICE THAT AL L ADVANCES FROM THE FARMERS WERE RECORDED IN THE ROUGH CASH BOOKS AND DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD PRODUCED CONFIRMATION LETTERS BUT INSTEAD OF CROSS VERIFYING THE CONFIRMATIONS, THE ASSESSING OF FICER PREFERRED TO MAKE ADDITION BY INVOKING THE PROVISION OF SECTION 68 OF THE INCOME TAX ACT WHICH IS MERELY BASED ON SURMISES AND CONJECTURES. THE ASSES SING OFFICER EXAMINED MOST OF THE FARMERS ONLY ON THE DIRECTION OF THE CI T(A). IT IS SEEN THAT ALL THE FARMERS WHO HAVE BEEN EXAMINED, HAVE ACCEPTED TO HA VE MADE PURCHASES OF PESTICIDES FROM THE APPELLANT AND GIVEN ADVANCES. O NLY TWO PERSONS HAVE DENIED FOR MAKING ADVANCES BUT BOTH THE PERSONS HAV E STATED TO HAVE PURCHASED PESTICIDES FROM THE APPELLANT. THIS FACT CANNOT BE IGNORED. AS ALL THE FARMERS HAVE ACCEPTED TO HAVE MADE PURCHASES FR OM THE APPELLANT AND THE ASSESSING OFFICER HAS ACCEPTED SUCH CASH SALES AGAINST ADVANCES IN COMPUTING THE TOTAL INCOME OF HE APPELLANT, HENCE, I AM OF THE OPINION THAT FURTHER ADDITION MADE FOR ADVANCES ON PEAK BASIS IS AMOUNTED TO DOUBLE TAXATION WHICH CANNOT BE SUSTAINED IN THE EYES OF L AW. THEREFORE, ADDITION OF RS.10,57,185/- MADE AS UNEXPLAINED CASH CREDIT IS H EREBY DELETED. THE APPELLANT GETS RELIEF OF RS.10,57,185/-. 11. WE FIND THAT THE ADVANCES WERE DULY RECORDED IN THE BOOKS OF ACCOUNT REGULARLY MAINTAINED IN THE COURSE OF BUSINESS AND FOUND DURING THE COURSE OF SURVEY WHICH WERE SIGNED AND SEALED BY THE SURVEY PARTY. IT IS THE CONTENTION OF THE ITA NO.2294/AHD/2006 A.Y. 2000-01 ITO WD-1, BHARUCH V. M/S. AGRO SALES CORPORATION, BHARUCH PAGE 7 ASSESSEE FROM THE VERY BEGINNING THAT IT HAD RECEIV ED ADVANCES AGAINST SUPPLY OF MATERIALS AND THIS FACT HAS NOT BEEN CONTRADICTED B Y THE REVENUE. WE FIND THAT THE DISPATCH QUANTITIES ARE SHOWN IN THE STOCK REGISTER AND THE RECEIPTS ARE SHOWN IN THE CASH BOOK MAINTAINED BY THE ASSESSEE. THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND NOW BEFORE US FILED THE CONFIRMATION FROM THE F ARMERS IN SUPPORT OF ITS CLAIM. THE ASSESSEE ALSO EXPLAINED BEFORE US THAT THE ASSESSEE HAS ISSUED BILLS ON THE DATE OF SUPPLY OF MATERIALS AND THEREFORE THE BILLS WERE BE ARING DIFFERENT SERIES NOS. ACCORDINGLY, THE ASSESSEE HAS ISSUED MATERIALS AGAI NST THE ADVANCES RECEIVED AND ALL ARE RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY HIM. ACCORDINGLY, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE AD DITION AND WE CONFIRM THE SAME. THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/12/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 23/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XIX, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD