VIJAY KUMAR LEGAL HEIR OF LATE SAVITRI DEVI,GHAZIPUR vs. ITO, WARD - 03(05), GHAZIPUR

None appeared on behalf of the assessee despite service of notice. Hence we proceed to dispose of the appeal, ex parte without presence of the assessee. The assessee Smt. Savitri Devi is a license holder of M/s. Bharat Petroleum Corporation and is authorised to run petrol pump. The assessee had memorandum of understanding executed with his son Shri Sanjay Kumar Agarwal handed over the entire business of petrol and kerosene to younger son Shri Sanjay Kumar Agarwal for annual compensation of Rs. 9,60,000/-. The assessee was running diesel division. During the course of 2 Vijay Kumar Legal Heir of late Savitri Devi assessment proceedings the Assessing Officer noticed that the assessee has received advance amount aggregating to Rs. 33,91,342/- from various government departments. The Assessing Officer asked the assessee to furnish confirmation from the relevant departments. However the assessee submitted that she has already supply copy of accounts relating to the advance received from that various government departments and also expressed inability to obtain confirmation letter from them. Accordingly the assessee requested the Assessing Officer to obtain confirmation letter by using his powers. Accordingly the Assessing Officer issued on sample basis notice under section 133(6) of the Act to the treasurery officer, office of the district magistrate, Ghazipur and also some other government departments to confirm the advance amount. The treasurery officer, Ghazipur replied that the advances given are adjusted within two months or within the same financial year. The Assessing Officer also informed the assessee that various government departments have denied payment of advances to the assessee. Accordingly the Assessing Officer held that the assessee has not proved the advance amount of Rs. 33,91,342/- and assessed the same as income of the assessee under section 68 of the Act. The learned CIT(A) also confirmed the same.

Learned DR submitted that the assessee has claimed to have received advances from various government departments. However, the assessee did not furnish any confirmation letter obtained from them.

We heard learned DR and perused the record. It is the submission of the assessee that the advances received from various government departments are adjusted against the bill due from them. Admittedly the assessee should be supplying diesel to various departments and the sale of diesel would have been accounted by the assessee. if the advance amount is adjusted against the amount due from the departments, even if there is no confirmation letter obtained from them, yet receipt of money either by way of 3 Vijay Kumar Legal Heir of late Savitri Devi advance or by way of balance amount from the government department would in effect prove the receipt of advances because the aggregate amount of advance amount and balance amount will not normally exceeds total billed amount. Hence, proper examination of the account of the assessee, in our view could prove the genuineness of the advances. We are making this observation for the reason that the assessee has expressed its inability to obtain confirmation letter from the government departments. Further it is a trading receipt against supply of diesel to the government departments. We noticed that the tax authorities have not examined this issue from this angle. Accordingly in the interest, we are of the view that the impugned claim of receipt of advance should be examined in the above said line. Accordingly we set aside the order passed by the learned CIT(A) on this issue and restore the same to his file for examining the issue in the light of the principles discussed above and take appropriate decision, after affording adequate opportunity of being heard to the assessee.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes.