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2005 (3) TMI 95 - ALLAHABAD HIGH COURTBogus purchases - Whether the Tribunal was in law entitled to confirm the addition in chuni-bhusi account ignoring the fact that complete quantitative account was available before the Tribunal? - HELD THAT:- We find that it is not the case of the applicant that he is a trader. On the other hand, the applicant is a manufacturer and in the manufacturing process, chuni-bhusi also gets manufactured as a by-product. It is not the case of the applicant that it had made the purchases of chuni-bhusi from other persons also. The Assessing Officer had recorded a finding that in order to lower down the profits, the bogus purchases have been introduced. Thus, we are of the considered opinion that the findings recorded by the Tribunal cannot be said to be based on irrelevant material and consideration. The applicant being a manufacturer of chuni-bhusi has not been able to establish the purchases in question which have been made from the non-existent firms. Further, the two firms owned by the brothers of the partners of the applicant-firm are said to have purchased the goods form the non-existent firm and even the invoices/bills have been prepared by the munim of the applicant. Merely because the applicant had been dealing with the firm that will not make the purchases of chuni-bhusi genuine when there was sufficient evidence to the contrary. So far as the question of deduction of purchases from the corresponding sales are concerned, we may mention that the applicant being a manufacturer of chuni-bhusi and purchases having been found to be bogus and there is no other purchases of chuni-bhusi, the benefit of deduction of such purchases has rightly been disallowed. Thus, we accordingly answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee. There shall be no order as to costs.
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