2004 (3) TMI 32

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....D of the Act. The sole question for determination before the Tribunal was as to whether the amount of Rs. 6,49,344 advanced by M/s. Daljit Singh and Bros, to the assessee was an advance for purchase of truck or was a loan or deposit. The Assessing Officer had levied the penalty by considering this amount as a loan or deposit. He discarded the explanation of the assessee that the amount was an advance for purchase of truck on the ground that no agreement had been executed while advancing the amount and the same had been executed after the return had been filed. The Tribunal, on the other hand, accepted the explanation of the assessee on the basis of the evidence on record. The findings of the Tribunal are contained in para. 7 of its order....

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....paid on account of cabin body on May 21, 1997, and May 23, 1997. Another amount of Rs. 300 has been paid on May 6, 1997, for R. G, which shows that M/s. Daljit Singh and Bros., had made the payments either to M/s. Tata Finance Ltd., or to any persons making the cabin body and R.C. also as a loan in violation of section 269SS of the Act. It is true that the advance and the deposit/loans are separate terms. We are of the view that for an advance the payer always takes something in lieu of the amount paid while in the case of deposit/loan the amount is returned by the payee to the depositor along with interest if any. In the instant case it is not the case of the Department that any interest was paid by the assessee to M/s. Daljit Singh and Br....

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....t as far as the oral agreement is concerned, the existence of such claim agreement has to be inferred from the circumstantial evidence as well as the conduct of the party. In the instant case it is noticed that the amount received by the assessee from M/s. Daljit Singh and Bros, has been utilised partly from making the payment of the financier, M/s. Tata Finance Ltd., and certain amount has been utilised for making cabin body. From the circumstantial evidence, it would be clear that the amount received was in the shape of advance and not in the form of loan or deposit. The provisions of section 269SS are applicable to the loan. It is also well settled that there is no bar in taking the advances much before the execution of the contract/agre....