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2011 (3) TMI 15 - HC - Income TaxDemand - fictitious claim - assessee was given full opportunity but none of the parties were traceable at the given address and the assessee also could not produce them for verification. Regarding payment through Cheque - The transaction having taken place through account payee cheques, we are unable to accept the contention that the transaction was a nonexistent one. If an assessee took care to purchase materials for his business by way of account payee cheques from a third party and subsequently, three years after the purchase, the said third party does not appear before the Assessing Officer pursuant to the notice or even has stopped business, the claim of the assessee on that account cannot be discarded as non-existent. In the case before us, the Revenue has not put forward any other ground, such as, it was not a genuine transaction for other reasons but has simply rejected the claim on the ground as if there was no such transaction.– Expenditure allowed. Regarding payment in cash - the alleged payments being made in cash and the amount involved being Rs. 50,675/- and Rs. 1,00,737/- respectively during the relevant Assessment Year and at the same time, the appellant having failed to produce any of the aforesaid parties except the bills alleged to be raised by those two concerns, the Tribunal below was justified in disbelieving those transactions and we do not find any reason to interfere with such finding which is basically a finding of fact based on appreciation of material evidence. - Expenditure disallowed
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