TMI Blog1999 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... 60,814 a statement showing computation of total income was filed along with copies of the profit and loss account, manufacturing account, balance-sheet and partner's capital account. It appears that the Assessing Officer issued show-cause notice on January 23, 1987, pointing to the assessee as under: "On an inquiry with the sales tax authorities as also with the Income tax Officer, Junagadh (who is having the jurisdiction over Keshod), it is learnt that Geeta Industries which is alleged to be the proprietary concern of one Shri Kishorechandra Hansraj at the given address at Keshod is merely a billing agent and there is no genuine seller as such. It has come to light that the S. T. Registration No. being 67110528, dated November 19, 1982, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the said details, it is to be stated that the goods from the said party have been received and have gone into production. This can be verified from the gate pass, avak chitti and weight chitti-supporting of all are enclosed herewith. (e) The said goods are sent to laboratory for report and sample report, etc., are also sent herewith. From the sample report quality difference is arrived and the party is also paid the difference or recovered also from the party, as the case may be. (f) The said goods are entered in our day-to-day receipt register where the assessee is entering all the 'receipt (sic) cakes. (g) These goods are produced and the production register shows the said production, copy is enclosed. (h) As per excises rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e firm does not arise." The Assessing Officer considered the materials and found that the statement with regard to the transaction could not be confirmed by one Mahesh, a partner of Vadilal Popatlal and Sons. The Assessing Officer also found that the Dalal as per letter dated February 18, 1996, produced copy of the bill dated December 5, 1983, issued in favour of the alleged party, Geeta Industries, for Rs.5,100 being brokerage received by cash for sale of oil cake. It appears that thereafter the said firm was reconstituted in the name of Maganlal Vashram and Sons. Maganlal Vashram and Sons had totally blank books of account. The Assessing Officer also came to the conclusion that the letters dated August 1, 1983, and August 12, 1983, alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before the Assessing Officer, the bills were produced from the four parties from whom it was alleged that the purchases were made were not genuine. At the time the purchases were made these were registered dealers under the sales tax law. The observations of the Assessing Officer that these people had also operated a bank account from the same bank and the amounts credited to their accounts were promptly withdrawn may give rise to some suspicion but there was no evidence to show that the assessee had not made any purchases. At best it could be inferred that these parties were set up by somebody else and the reasons could be manifold for that. But to say that the purchases made at all were at an inflated sale price would be without any just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985-86. The Assessing Officer believed the existence of Geeta Industries for that year. Not only this but it appears that Geeta Industries was supplying materials not only to the assessee but to others. In the case of Arun Industries, the amount paid to Geeta Industries was disallowed. However, the Tribunal on appreciation of evidence deleted the entire disallowance which has been upheld by this court and by the apex court as observed in para. 2.4 of the judgment of the Tribunal. In Arun Industries against the decision of the High Court, SLP was preferred by the Revenue and the same has been rejected. The Tribunal has considered that aspect also. In the present case, the details about purchases were furnished. The transactions were thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the account of Geeta Industries. Mr. Naik, learned counsel for the Revenue, submitted that if the court is accepting the existence of Geeta Industries then nothing is required to be argued by him. It is required to be noted that the amount has been paid by cheques and the party has withdrawn the amount by bearer cheques. Mr. Naik submitted that from the same bank the amount has been withdrawn. According to our opinion, it goes without saying that it was within the knowledge of the banker as to who was the account holder and who withdrew the amount from the same bank. The Assessing Officer by due diligence could have unearthed the fact that Geeta Industries is a bogus party by recording the statement of the bank manager, accountant or c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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