2012 (8) TMI 615

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....ccounts of the assessee, noticed that a sum of Rs. 16,00,900 is credited in the capital account. Explanation was sought in this regard and reply of the assessee was that it was an advance payment remitted by M/s. India Gems and Beads, USA, for supply of goods, but due to inadvertence the said amount was credited to the accounts of the assessee in the balance-sheet. However, the Assessing Officer was not satisfied and he added the said amount of Rs. 16,00,900 in the income of the assessee and directed to initiate penalty proceedings also. The assessee preferred an appeal. The appellate authority, i.e., the Commissioner of Income-tax (Appeals)-II, Jaipur, vide his order dated April 28, 2009, was satisfied with the explanation/reply furnished ....

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....he level of bank to close the FEMA proceedings and obviously in the account books it shall be an advance payment. The nature of any payment received cannot be decided with the accounting treatment given and, there- fore, in my considered view, even if due to mistake or mis understanding if the accountant has credited the said money into the capital account of the appellant it cannot become the part of capital and then obviously it shall be in the nature of advance payment which certainly cannot be part of revenue receipts because looking to the nature of business the revenue receipt shall be the export proceeds only and not the advance amount received. Even in the past when the advance amount received was more or less but they did not assum....