TMI Blog1976 (7) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ess given and hence the ITO called upon the assessee to file copy of account of Modern Traders and furnish details. The ITO noted that the payments were made by cheque which were deposited with Bank of India, Station Bench, where Modern Traders were introduced by the assessee. The cheques issued by the assessee were deposited in this bank and that amounts were immediately withdrawn. The assessee expressed inability to produce the party. But urged that the assessee firm had proper vouchers, it paid for purchases by cheques and the fact that the assessee introduced Modern Traders to the bank and Modern Traders withdrawn the amounts given by the assessee were of no consequence. The ITO, however, concluded that the issue of cheques were mere ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments made by the assessee to Modern Traders came back to the assessee in some from. The assessee had maintained stock account; in view of the learned AAC s. 69 or 69A did not come into play. Inspite of the admission of Modern Traders, the learned Sales-tax Department had accepted the assessee's return. In all these circumstance, the AAC accepted the assessee's appeal and deleted the addition. 3. The ITO has come in appeal against the order of the learned AAC. Shri S. Parthasarthy, the learned Departmental Representative explained to us the various points noted by the learned ITO. He urged that inspite of specific opportunity the assessee did not produce Modern Traders and they could not be traced at the address given by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x authorities was behind the back of the assessee and inspite of the assessee's request, a copy of the statement was not given to the assessee. Again, the assessee had requested the ITO by letter dt. 31st March, 1973 that the ITO may exercise his powers to compel attendance of Modern Traders in the ITO's Officer. It was also explained that purchases were made in 1969 and enquiry was in 1973 by which time Modern Traders have left their place of business. 5. In reply, Shri Parthasarathy, for the Department stated that the assessee's letter dt. 31st March, 1973 which contained both the request to get a copy of Modern Traders' statement before the Sales Tax Department and request to summon them was received after the assessment order was pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Here in addition, the goods have been entered in the stock register of the assessee, monies have been paid by crossed-cheques which were credited to the account of Modern Traders. The fact that Modern Traders were introduced by the assessee, the fact that Modern Traders withdrew the amounts immediately on encashment of cheques may raise suspicion and alert the Department to a further probe but by themselves, they do not establish the case against the assessee. There is no evidence that any part of the monies came back to the assessee in any form. It was in the first instance for Modern Traders to explain their contents. 7. Once it is accepted that the goods were received from Modern Traders action under s. 69 or 69A also would not su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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