TMI Blog2006 (11) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases made and job work expenses paid without appreciating the full facts of the case and completely in disregard to the submission made. That the learned CIT (Appeals), erred both in law and on facts in treating the purchases made/job work executed from the following parties as bogus without nexus to any material available on record: M/s. Bright Enterprises ₹ 6,89,413 M/s. Aries Enterprises ₹ 94,960 M/s. Apex Industries ₹ 3,83,434 M/s. O.S. Enterprises ₹ 1,10,926 M/s. Raj Enterprises ₹ 6,44,347 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned order upheld the disallowance for the reason that M/s. Bright Enterprises has not been able to confirm the transactions shown by the assessee and that it has not been able to produce remaining parties. It was observed that onus is on the assessee to substantiate the genuineness of expenses claimed by it. 6. Learned counsel for the assessee Shri Satyen Sethi, submitted that the assessee produced complete books of account with supporting vouchers. No discrepancy was pointed out in the books of account maintained in the regular course of business. None of the party who attended in response to summons issued under section 131 has denied the transactions of purchase and/or job work. In the order passed under section 250/143(3), d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the High Court. Facts of the present case are far more convincing.Merely on the basis of discrepancy in the books and/or statement of sellers or parties rendering job work, purchases/job work charges cannot be disallowed in the hands of purchasers. Reliance is placed on CIT v. Basant Investment Corp. [1999] 238 ITR 680 (Cal.). Without prejudice, it was submitted that since sales/turnover declared by the assessee has been accepted, GP rate has been accepted, source of payment to suppliers/parties providing job work has not been doubted, no discrepancy has been pointed out in the books of account and the trading results compare favourably, therefore, disallowance of purchases and job charges paid was uncalled for. Reliance is placed on J.H. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate order dated 19-1-2001, the manufacturing process is described in a manner that CR Sheets, paints, plastic powder, glass, bulbs and wires, etc., are the main raw materials. The manufacture of tractor lights is done in four stages. In the first stage, CR Sheets, purchased from various companies are out into pieces and then sent to pressing shop, which is a part of assessee s own factory. The sheets are redrawn into different kinds of dyes like reflector, rim, housing, mounting, rim racket and boy bracket. This involves cutting of sheets, drawing, trimming, binding and punching holes. Thereafter, these parts are painted from outside and placed in oven for drying them. The dust is removed from these parts by using emery paper. While t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties by account payee cheques only and wherever required also deducted tax at source. The transaction was entered into during the financial year ending on 31-3-1996. The enquiries were conducted in the year 2003. Thus, it is not unusual that the parties might have left in between. In the circumstances, to make an addition only because the parties are not available or verification is stretching the matter too far. When the transaction was made with the same parties in the subsequent years, the same was accepted and payments made to them was allowed as deduction. The assessee has also produced the bank statement of all the above parties which shows that the cheques have been received by them in their bank account. It is observed from the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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