ITA No.343/CTK/2024

Parties Involved

Facts Summary

The assessee, during the year under consideration, received advances of Rs.31,90,000/- from 31 parties in cash as interest-free advances and Rs.28,05,388/- from three parties as loans. The Assessing Officer (AO) considered these credits as not genuine due to the assessee's failure to provide evidence of the genuineness of the transactions and the creditworthiness of the parties. The assessee also failed to provide any confirmation from the parties accepting or confirming that they had made advances in cash against the booking of vehicles. The assessee claimed that these were advances against the supply of goods, but this claim was devoid of merit as the customers never turned up to take possession of the vehicles or repay the advances. The assessee also failed to provide details to establish the genuineness of the expenses claimed.…

Legal Issues

• 1. Addition made under section 68 of the Act on account of loans and advances of Rs.59,95,388/-.
• 2. Disallowance of Rs. 1,48,198/- on campaigning & loan mela expenses at different rural areas.
• 3. Disallowance of Rs. 54,603/- on ad-hoc and estimated basis out of various legitimate business expenditures.

Judgment Outcome

Decided in favour of Assessee.

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