TMI Blog2005 (3) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts giving rise to the present reference are as follows : The applicant has been assessed to income-tax in the status of a registered firm. It is engaged in the business of manufacture and sale of rice by hauling paddy. In the process of manufacture of rice, the polishing is done and the powder produced in the course of producing rice is known as Kana which is a waste product and is an animal fodder and also used for producing oil. The applicant had also been dealing in the purchase and sale of Kana. During the assessment proceedings it was found that the applicant had failed to explain the quantity of purchase of Kana. An attempt was made by the Assessing Officer to call for the alleged sellers from whom the Kana was alleged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranches. As to why Sri Ram Khelawan who is a businessman, would deny having sold Kana to the assessee. There is nothing in his statement which may go to discard his testimony, Chitani Lal had stated that he was running a flour mill (Atta Chakki) in his own house which was installed by him in the year 1985 at a cost of ₹ 6,000. His daily earning is about ₹ 15 from the said Chakki. Prior to it, he was employed with Bhuteshwar Rice Mill, Girwan and he left that service in the year 1983. He had also stated that he never indulged in the business of rice and Kana. There is nothing to indicate that he was making a false statement. Since he never dealt in rice and Kana, there could be little occasion for him to have sold Kana to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of purchases to the income irrespective of the fact whether the rate of gross profit goes up and whether the resultant gross profit is higher than the gross profit normally shown in yester years. In view of the above discussions, we uphold the addition of ₹ 36,818. From the order of the Tribunal reproduced above, we are of the considered opinion that as the purchases made by the applicant had been found by all the authorities to be bogus and not genuine the Assessing Officer was justified in adding the sum of ₹ 36,818 towards its income. Further as the purchases were held to be not verifiable the Tribunal was justified in holding that no such purchase was made and, therefore, the benefit to set off could not have be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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