2017 (6) TMI 725

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....nd Rs. 45 lakhs for the assessment year 2011-12 and 2012-13 respectively from M/s. Manish Traders and interest of Rs. 1,95,765/- for the assessment year 2011-12 as claimed by the assessee. The assessee explained before the AO that a sum of Rs. 25 lakhs was received as trade advance through cheque. The assessee subsequently refunded the trade advance. In the books of account, it was shown as loan received from M/s. Manish Traders. Therefore, it was explained before the AO that what was received by the assessee is not a loan but trade advance. In fact M/s. ManishTraders placed orders to the extent of Rs. 74,03,032/- at the time of making advance of Rs. 25 lakhs. Since the rates were increased the order was cancelled. The AO however rejected t....

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.... remains that there was bank transactions between the assessee and M/s. Manish Traders. The assessee claims that what was received by the assessee is a trade advance and not a loan. Therefore it cannot be treated as income of the assessee. The assessee also claims that the trade advance of Rs. 25 lakhs was returned to M/s. Manish Traders. The assessee has also raised a ground with regard to reopening of the assessment. The fact remains is that the addition of Rs. 25 lakhs is made on the credit fund in the books of account of the assessee and another sum of Rs. 1,95,765/- was made towards interest and the total addition of Rs. 26,95,765/-. The assessee appears to have claimed before the AO that M/s. Manish Traders could not pay the balance a....

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.....2010 Rs.14,00,050/- 06.10.2010 Rs.11,08,480/- Total Rs.27,58,555/- It is also seen that M/s. Manish Traders issued a purchase order to the assessee in which he asked for various items for a sum of Rs. 74,03,032/-. The deal did not materialize into a sale transaction.I t is also seen that M/s. Manish Traders issued a cheque dated 29.09.2009) to the assessee drawn by M/s. Mahalakshmi Trading Company in favour of the assessee for Rs. 23,00,000/-. A further sum of Rs. 1,00,000 /- was also received by the assessee by cheque dated 12.01.2010 drawn in favour of M/s. Mahalakshmi Trading Company. Both were reflected in the bank account of the assessee. Perusal of the Axis Bank a/c in the name of Kushalraj reveals that Rs. 23,00,000/- was cr....