TMI Blog2015 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) noticed the inherent contradiction in the AO’s action - on the one hand, accepting the higher GP Rate, which in turn was based upon the total turnover of the assessee, while on the other disallowed the entire amount of purchases from the three parties and not only with respect to the amount outstanding. Thus the CIT (Appeals) was justified restricting the addition to ₹ 28,87,305 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... railways break system and components thereof for the Indian Railways and wagon builders. All the sales by the assessee are made to the government agencies such as Indian Railways and coach factories. The G.P Rate declared by the assessee in the A.Y. 2003-04 was better in comparison to that in the immediately preceding assessment year. The Assessing Officer (AO) in order to verify purchases made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any response of the three parties, the AO disallowed as unverifiable amount, a sum of ₹ 76,39,453/-. 3. On appeal, the CIT(Appeals) took into consideration the materials and granted partial relief to the assessee in the following terms: 25. 1 have carefully considered the observations made by the A.O. in the Assessment Order and the facts of the case. On the basis of enquiries conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added it to the appellant's income u/s 41(1) of the Act. Accordingly, the addition under this head is restricted to ₹ 28,87,305/-(14,34,585/- +3,11,204/-+14,11,515/-) on account of cessation of liability of credit balance outstanding in the name of the three parties in the appellant's books. 26. In the result the appeal is partly allowed . 4. The ITAT has merely confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the higher GP Rate, which in turn was based upon the total turnover of the assessee, while on the other disallowed the entire amount of purchases from the three parties and not only with respect to the amount outstanding. Thus the CIT (Appeals) was justified restricting the addition to ₹ 28,87,305/- in the facts of the case, since that was the amount indicated as outstanding as on 31.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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