TMI Blog2005 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... iefly stated, the facts giving rise to the present reference are as follows: The applicant has been assessed to income-tax in the status of a firm. It is engaged in the manufacture of gram, pulses, rice, chuni-bhusi, etc. While examining the account of the applicant, the Assessing Officer has noticed that the applicant has made purchases of chuni-bhusi from the following parties: -------------------------------------------------------- Name of party Bill No. Quantity of Amount Rate and Date chuni-bhusi -------------------------------------------------------- (1) (2) (3) (4) (5) -------------------------------------------------------- 1. M/s. Ayodhya 17A 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was also noticed that the bills of chuni-bhusi issued by M/s. Ayodhya Prasad Gupta and M/s. Ram Prasad Gupta have been prepared by the munim of the applicant. The Income-tax Officer had added the entire amount of such purchases in the income of the applicant. Feeling aggrieved, the applicant preferred an appeal before the Commissioner of Income-tax (Appeals) who has upheld the addition. The second appeal before the Tribunal has failed. We have heard Sri Satish Mandhyan, learned counsel for the applicant, and Sri Shambhoo Chopra, learned standing counsel appearing for the Revenue. Learned counsel for the applicant submitted that the applicant has made the purchases of chuni-bhusi from the four persons and even if two of them were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are entered in satti bahi maintained by it. But no mention of the chuni-bhusi said to have been purchased by the assessee is to be found in the satti bahi or the stock register. On enquiry by the income-tax inspector, the firm M/s. Pashu Aahar Kendra, Shiva Pashu Aahar Kendra and Chaudhary Brothers were found to be non-existent. In the enquiry it has also come to light that such firms never existed in the past. It is also worthy of note here that in the statement Shri Ayodhya Prasad Gupta has stated that there was no fixed shop of Pashu Aahar Kendra and Shiva Pashu Aahar Kendra, while in the bills purporting to have been issued by the said firms, a definite address has been mentioned including the number of the building. The statement tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shiva Pashu Aahar Kendra to Ayodhya Prasad Gupta and Ram Prasad Gupta appears in the handwriting of the assessee's munim. The bills by Shri Ram Prasad Gupta had not been issued on the date of sale to the assessee. This fact was admitted by him in his statement, a copy of which appears at page 119 of the assessee's paper book. Moreover, Shri Ayodhya Prasad has admitted in his statement, a copy of which appears at pages 113-114 of the assessee's paper book, the purchases of chuni-bhusi have been entered by him in his books at the end of the year. It is thus obvious that the entry about the purchase of chuni-bhusi was not made by him on the date when he claims that the purchases were made by him. That fact also makes the transactions very doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been made by the assessee. He has contended that in case the purchases shown by the assessee are held to be bogus, then in that event the conclusion that can be drawn is that the purchases made by the assessee are unvouched. In the circumstances, the entire amount of the purchases should not be added to the total income of the assessee. He has also submitted a statement of total sales and purchases of chuni-bhusi in the year which appears at pages 95-96 of the assessee's paper book He has also pointed out that the gross profits shown by the assessee, out of the dealings in chuni-bhusi, compares favourably with the result in the earlier years and for that reason also no addition should have been made by the authorities below. He has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not the case of the applicant that he is a trader. On the other hand, the applicant is a manufacturer and in the manufacturing process, chuni-bhusi also gets manufactured as a by-product. It is not the case of the applicant that it had made the purchases of chuni-bhusi from other persons also. The Assessing Officer had recorded a finding that in order to lower down the profits, the bogus purchases have been introduced. Taking into consideration the entire facts and circumstances of the case, we are of the considered opinion that the findings recorded by the Tribunal cannot be said to be based on irrelevant material and consideration. The applicant being a manufacturer of chuni-bhusi has not been able to establish the purchases in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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