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2016 (2) TMI 665 - AT - Income TaxDisallowance of loss suffered in trading of foam and fabrics - CIT (A) had deleted the said addition on the basis that complete books of accounts were produced, examined and verified on test-check basis - Held that:- All the transactions of purchases were duly confirmed and 90% of the sales are also confirmed. However, the plea of the DR which was accepted by the Tribunal was that the evidences accepted had not been considered by the AO, thus the AO in the second round, ought to have examined the aforesaid evidence and arrived at a conclusion. However, it is noticed that the AO has simply borrowed the conclusion from the original order of assessment. This approach is in blatant disregard of the own stand of the Revenue before the Tribunal in the first round. Thus, to this extent, the approach of the AO is patently erroneous. Now, coming to the merits of the matter, it is seen that assessee has declared sales of ₹ 2,39,24,400/- and purchase of ₹ 3,37,29,782/-. The transactions are duly recorded in the books of accounts which have been examined and accepted in the first round by CIT (A) and no specific observation vis-à-vis the said books of accounts by the AO in the second round. Moreover, these are audited books of accounts. The case of the AO is that new addresses of the parties have not been furnished. In our opinion, without carrying out any investigation in respect of evidences on record, such a conclusion is perverse. Further, nonproduction of stock-register or rates by itself cannot be a ground to reject the confirmations furnished by the assessee in which PAN number/Ward number, address of parties, details of the transactions have been mentioned. No doubt claiming a loss on purchase and sale to the same party may result into a doubt, but such a doubt without any verification or investigation vis-à-vis the evidence tendered does not acquire the character of evidence so as to hold that the trading transactions are bogus or sham. More-so, when the Revenue had requested for examination of the evidence and such request was accepted by the Tribunal in the first round and yet AO failed to carry out investigation. Thus, this is a case of lack of investigation which vitiates the adverse conclusion drawn by the AO. We, therefore, see no reason to deviate from the conclusion of the first appellate authority. - Decided against revenue
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