TMI Blog2006 (12) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of Kishinchand Chellaram vs. CIT [ 1980 (9) TMI 3 - SUPREME COURT] and in the case of Tin Box Co. vs. CIT [ 2001 (2) TMI 13 - SUPREME COURT] come to the rescue of the assessee. The Hon'ble apex Court in these decisions have categorically held that unless the contents of the affidavits, etc. are confronted with the assessee by giving opportunity at cross-examination, the same cannot be read in evidence against the assessee. Thus, it is clear that the purchase in question cannot be held to be bogus. As a result, the impugned addition stands deleted. In the result, the appeal is partly allowed. - Member(s) : HARI OM MARATHA. ORDER-HARI OM MARATHA, J.M.: This appeal by the assessee is directed against the order of the CIT(A), dt. 18th Nov., 2005 which pertains to asst. yr. 1999-2000. 2. Briefly stated, the facts of the case are that the assessee derives income from purchase and sale of agricultural produce and also from 'Arhat'. The assessee firm filed its return for this year on 28th Oct., 1999 declaring total income of Rs. 12,539 which was assessed under s. 143(1)(a) on 30th Nov., 1999. Subsequently, the AO received information f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edited in current account No. 156 whereas balance sum of Rs. 3,000 was withdrawn in cash by M/s Lal Chand Rai Harish Kumar. The AO recorded the statement of the asstt. manager of the bank under s. 131 on 19th Jan., 2004 and made verification in respect of entry on the reverse side of the self cheque. The asstt. manager stated that a sum of Rs. 2.20 lakhs was deposited in the current account No. 156 and the balance amount was given in cash. According to the manager, the reverse entry in the banking accounting system is known as contra entry. From this factual matrix, the AO concluded that M/s Lal Chand Rai Harish Kumar issued a self cheque of Rs. 2.23 lakhs and out of which only cash of Rs. 3,000 was paid at the counter while the remaining sum of Rs. 2.20 lakhs was credited in the account of the assessee M/s Jagdamba Trading Company. When confronted the assessee flatly denied any connection with the relevant narration made on the reverse side of the cheque issued by M/s Lal Chand Rai Harish Kumar. It was further explained that on 18th March, 1999 cash of Rs. 2,20,000 was deposited by the assessee in the bank from the withdrawals earlier made from the Bank of Maharashtra. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account of M/s Lal Chand Rai Harish Kumar, cheque of M/s Jagdamba Trading Company amounting to Rs. 2,23,000 was credited first and no credit was made in CA 156 after making the payment of the above cheque. It was further submitted that in the account of CA 156, which belongs to the assessee firm, the opening balance was Rs. 9,394 and on that day the assessee deposited Rs. 2,20,000 in cash after withdrawing a sum of Rs. 3,50,000 from his bank account with Bank of Maharashtra. It was only after depositing this cash amount that the concerned cheque was issued to M/s Lal Chand Rai Barish Kumar and the same was debited and, thereafter, cheque No. 50890 issued in self name by M/s Lal Chand Rai Harish Kumar was paid by the bank. 6. On the other hand, the learned Departmental Representative has placed heavy reliance on the orders of the authorities below. 7. Having gone through the rival submissions, in the light of the available evidence on record, it is a crystal clear finding of facts that there is no proof on record that the amount of Rs. 2,20,000 was deposited in the account of M/s Jagdamba Trading Company a/c. This was amply verified by the Department and the AO could not mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the purchase in question and it has only disputed the purchase from the particular party. it is hardly a case of unexplained investment. The assessee has clearly shown and explained the alleged investment. In case the seller did not pay sales-tax and Mandi tax. the purchase in question cannot be taken as bogus. There are hundred and one reasons for the seller to tell untrue facts and unless the seller is confronted with by the assessee, the alleged statements do not have any useful meaning. The AO took the purchases made by the assessee from these parties as fictitious and bogus mainly on. the strength of the affidavits of these parties tendered before sales-tax authorities. These affidavits and even statement of the asstt. manager of the bank were never the subject-matter of cross-examination by the assessee. In these circumstances, the decisions of Hon'ble. Supreme Court in the case of Kishinchand Chellaram vs. CIT (1980) 19 CTR (SC) 360 : (1980) 125 ITR 713 (SC) and in the case of Tin Box Co. vs. CIT (2001) 166 CTR (SC) 509 : (2001) 249 ITR 216 (SC) come to the rescue of the assessee. The Hon'ble apex Court in these decisions have categorically held that unless the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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