TMI Blog2004 (6) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... rent parties. The AO noticed that three parties were not found at the address given by the assessee, namely, M/s Ansu Associates, Rolex Enterprises and Konica Steel. The AO asked to produce these parties but the same could not be produced before the AO. The AO has also issued summons under s. 131 to six parties which were returned by the postal authority with the remark "not known". In case of Prapti Corpn., summons issued was served but nobody remained present on the date of hearing. The AO has also made enquiries from bank and Shroff Pari Rakesh Kumar Natwarlal in respect of bill discounted. The AO noticed that the discounting cheques were issued to parties. The AO further noticed from the cash book of Pari R. Natwarlal that the amount wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69C, has clearly mentioned that 'At present, unaccounted expenditure is treated as income under s. 69C of the Act, but there is no corresponding provision for disallowance of such expenditure. Hence, while the assessees are presently being brought to charge under s. 69C, they are able to set off the expenditure as deduction under the general provision of s. 37 of the Act'. Till the law is amended the correct interpretation of the Act as it presently stands has to be given. The AO was, therefore, required to give a deduction of Rs. 27,39,410 for such expenditure. I direct the AO to give such deduction of Rs. 27,39,410 and in the result, the addition would be nil. The addition of Rs. 27,39,410 is, therefore, deleted." 3. We have heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,10,709 2. Rolex Enterprises Rs. 1,11,042 3. Konica Steel Rs. 2,58,734 Rs. 5,80,485 On the basis of above facts, at the most it, can be presumed that the assessee did not make purchases from above parties but made from other unregistered dealer and got benefit of margin of purchases from unregistered dealer. We find that to that extent an estimation of profit can be made which will be fair and reasonable under the facts and circumstances of the case. Therefore, for the above purposes we estimate Rs. 50,000 and accordingly the order of the CIT(A) is modified and the addition to the extent of Rs. 50,000 is sustained and balance addition of Rs. 26,89,407 is deleted out of the total addit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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