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TMI Blog2012 (6) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee - M/s J.R. Solvent Industries (P) Ltd., against the order dated 19.9.1995, passed by the Tribunal in ITA No. 654/Chandi/1990, in respect of the Assessment Year 1987-88. A common question raised for determination of this Court in all the cases would be:- "Whether the Tribunal was right in law in treating the purchases from non-existent firms as recorded in the books of account of the assessee as bogus without giving an explicit finding that the provisions of Section 145(2) of the Act were attracted in the case of the assessee, especially when complete quantitative details were available?" 2. The facts are being referred from ITR No. 105 of 1997. The applicant-assessee is a Private Limited Company deriving its income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n having treated the purchases of Rs. 5,76,645/- from M/s Raj Kumar Raghbir Kumar recorded in the assessee's books of accounts, as bogus without giving an explicit finding that the provisions of Section 145(2) were attracted in the case of the assessee specially when complete quantitative details were available?" 3. In order to put the controversy in its proper prospective, it would be appropriate to make a reference to Section 145 of the Act, as it stood at the relevant time and the same reads as under:- "Method of accounting. 145.(1) Income chargeable under the head "Profits and gains of business or profession" or "Income from other sources" shall be computed in accordance with the method of accounting regularly employed by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed by the Tribunal as is evident from the following observations made by the Tribunal:- "9. We have carefully considered the rival submissions as also the facts on record. We must compliment the Assessing Officer for having made such detailed investigation into the case. It appears that the assessee company showed purchases of Rs. 5,76,645/-for assessment year 1987-88 and of Rs. 17,25,300/- for assessment year 1988-89 from M/s Raj Kumar Raghbir Kumar. Copies of sale bills issued by M/s Raj Kumar Raghbir Kumar do not inspire any confidence because they do not indicate any Sales-tax/Central Sales-tax number nor the telephone number. The said party was not found to be in existence when enquiries were made by the Assessing Officer in 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny purchases of Rs. 5,76,645/- from M/s Raj Kumar Raghbir Kumar. We also do not subscribe to the view of the ld. CIT(A) that the assessee might have made purchases from some other party/parties but that it did make purchases of Rs. 5,76,645/-. In the first instance, that is not even the case of the assessee that it had made purchases from some other party or parties. Secondly, there is no independent evidence that the goods did reach the assessee's premises and were used in production. ............." 6. A bare perusal of Section 145 of the Act would reveal that the provision deals with method of accounting. Under Section 145(2) of the Act if Assessing Officer is not satisfied about the correctness or the completeness of the accounts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the applicant-assessee did make genuine purchase either from M/s Raj Kumar Raghbir Kumar or some other party or parties and, hence, no addition could be made on that count. The aforesaid findings, in fact, were reversed and, therefore, the question of law. 8. Mrs. Savita Saxena, learned counsel for the revenue has, however, argued that overwhelming evidence against the applicant-assessee would show that the whole purchases shown by the applicant-assessee from M/s Raj Kumar Raghbir Kumar were bogus. The Tribunal has rejected the copies of the sales tax bills purported to have been issued by the aforesaid firm because the bills did not inspire any evidence as the bills did not carry any sales tax/Central Sales Tax number nor the tel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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