TMI Blog2006 (8) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... any clinching evidence to prove that these alleged purchases were verily bogus and not genuine. The AO has not arrived at a judicious conclusion after applying his own mind. Strangely enough, the AO has half-heartedly accepted certain quantum of purchases because out of total purchases aggregating Rs. 9,93,442, he has disallowed only a peak of Rs. 3,36,852. This finding of the AO is paradoxical. The AO did not make requisite investigation against the two sellers. Thus, we confirm the impugned deletion and dismiss ground No. (i) of the appeal. Addition made by the AO by holding that the assessee did not pay any sales-tax to the Department or Mandi tax on 'Arhat' - AO added this amount by multiplying 5.6 per cent with total pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque 5-12-1998 2,38,252 Narma 16-11-1999 3,000 Cheque 8-12-1998 3,40,892 50,000 Cheque 5-5-1999 M/s Lal Chand Rai Harish Kumar 1,68,584 Narma 4-12-1998 22,040 Narma 07-12-1998 1,55,160 Narma 5-11-1998 3,952 Narma 10-12-1998 1,77,534 Narma 8-12-1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in total agreement with the learned AO [sic-CIT(A)] as well as with the learned Authorised Representative, because no such addition can be made in the hands of the assessee on the basis of observations made by a third party. In this case, the addition rests mainly only on the observations of the Sales-tax Department. The assessee was never associated with the enquiries made by the Sales-tax Department to that extent. The satisfaction of the AO himself is of the prime importance while making assessment of an income and these duties cannot be performed by substituting the satisfaction of someone else. The assessee did pay for the purchases he made from the above two parties through cheque as is evident from the above chart. The statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Vinod Kumar, Prop., Vinod Brothers, Sriganganagar, in ITA No. 623/Jd/2005; Asst. yr. 1999-2000, dt. 17th Dec., 2005, on identical facts by holding that on the basis of third party's observation, no addition can be made. Therefore, by following the above decision and in view of our foregoing observations, we confirm the impugned deletion and dismiss ground No. (i) of the appeal. 5. Ground No. (ii) relates to addition of Rs. 55,632/- made by the AO by holding that the assessee did not pay any sales-tax to the Department or Mandi tax on 'Arhat' on the purchases made from the above two parties and thus made extra profit @ 5.6 per cent. The AO added this amount by multiplying 5.6 per cent with total purchase value of Rs. 9,93, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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