9911796707
TMI Blog2016 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and thereby deleted the disallowance. 2. While admitting this matter, the Court has framed the following question of law: "Whether, in the facts and circumstances of the case the ITAT was right in law in confirming the addition of profit margins on alleged unaccounted sales when such sales are already reflecting in the profit and loss account of the appellant?" 3. Learned Counsel for the appellant has contended that the ITAT has seriously committed an error on accounting profit on the unaccounted sales which has already been reflected in the books of accounts. 4. This matter was adjourned time and again to enable the learned Counsel for the appellant to produce on record any document to support his above referred contention. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) accepted the finding of the Assessing Officer to the extent that the four parties for A.Y.1984-85 and six parties for A.Y.1985-86 from whom the goods were shown to have been purchased were not traceable and hence, admittedly, the goods in the form of raw materials were purchased at a price which was lower than the market price, that no purchase bills at the said price were available, and accordingly, apparent sellers were providing accommodation entries to the assessee so as to enable the assessee to enter the goods purchased from third parties in the regular Books of Account. Accordingly, Commissioner (Appeals) came to the conclusion that 25% of the value of the purchase price could not be treated as genuine, or in other words,the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal. That there was no material before the Tribunal for upholding the addition to the extent of 25% of the value of the purchases, considering the evidence in form of comparative charts filed by the assessee wherein it was shown that the assessee had received similar raw materials in similar manner from other parties and had paid the same purchase price; secondly the charts also reflected purchases by persons other than the assessee from third parties engaged in similar line of business reflecting the same purchase price. It was contended that on the basis of the aforesaid pieces of evidence no ground was made out for retention of addition to the extent of 25% of the value of purchase. That once the Tribunal had found that purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts claimed is fair and reasonable and no interference is called for. The CIT(A) has gone through the purchase prices of the raw material prevalent at the time and rightly came to the conclusion that the disallowance to the extent of 25% was called for. It is established that the parties were not traceable; they opened the bank accounts in which the cheques were credited but soon thereafter the amounts were withdrawn by bearer cheques. That fairly leads to the conclusion that these parties were perhaps creation of the assessee itself for the purpose of banking purchases into books of accounts because the purchases with bills were not feasible. Thus the above noted parties become conduit pipes between the assessee firm and the sellers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there is no material to dislodge such finding. The issue is not whether the purchase price reflected in the Books of Accounts matches the purchase price stated to have been paid to other persons. The issue is whether the purchase price paid by the assessee is reflected as receipts by the recipients. The assessee has, by state of evidence available on record, made it possible for the recipients not being traceable for the purpose of inquiry as to whether the payments made by the assessee have been actually received by the apparent sellers. Hence, the estimate made by the two Appellate Authorities does not warrant interference. Even otherwise, whether the estimate should be at a particular sum or at a different sum, can never be an issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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