TaxTMI 
TaxTMI 
2004 (2) TMI 295
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....,800 to Mr. Ashok Bhardwaj (building architect), proprietor of M/s Bhardwaj and Associates,Saharanpur. The details of payments as per the assessee were as under: S. No. Date of Bill Amt. of Bill Mode of payment date & Cheque No. Date of cheque Amt. of cheque Person who has encashed the cheque 1. 30-8-95 42,500 Bearer Chq. No. 1033 dt.22-2-1997 22-2-1997 1,460 Ashok Bhardwaj 2. 1-11-95 27,500 Bearer chq. No. 1107 26-5-1997 25,000 Rupish Rana 3. 12-12-95 30,800 Bearer Chq. No. 1109, dt.26-5-1997 29-5-1997 40,000 Anil 4. 20-2-96 15,000 Bearer Chq. No. 1451, dt.19-2-1998 28-2-1998 20,000 (name not clear) 5. 28-1-96 25,000 Bearer Chq. No. 1452, dt.21-2-1998 21-2-1998 20,000 S.K. Gaur 6. 20-2-96 15,000 Bearer Chq. No. 1453, dt.23-2-1998 23-2-1998 20,000 Mahesh Kumar 7. -- -- Bearer chq. No. 1454, dt.28-2-1998 28-2-1998 20,000 Mahesh Kumar The AO observed from the perusal of the balance sheet of the assessee-company that the entire amount of Rs. 1,85,800 remained payable at the close of the year. He observed that althoug....
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....o had encashed the above bearer cheques was found to be working with Mr. Ashok Bhardwaj. He further observed that the cheques in sequence number had been issued for different dates. When the payments were to be made by way of bearer cheques after a gap of almost three years, then where was the need to issue bearer cheques, the AO questioned. He was of the view that if the work was actually carried out by Mr. Ashok Bhardwaj, building architect, in the relevant year then how have the payments been delayed for such a long period. He further was of the view that why the payment could not be made in the relevant financial year. Accordingly, he was of the view that the assessee-company has issued bearer cheques and got them encashed through its own persons. 3. In the circumstances he was of the view that the entries have been purchased in the name of Mr. Ashok Bhardwaj and reliance was placed on the fact that Mr. Ashok Bhardwaj himself claimed that he has never rendered any services for installing/erecting any plant and machinery for sugar factory. From the facts of the case and considering the background of Mr. Ashok Bhardwaj, the AO concluded that Mr. Bhardwaj was a petty man and a ....
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....It was further contended that the contract was genuine and all the bills have been raised by M/s Bhardwaj & Associates for which reliance was placed upon copies of the bills. It was further contended that the assessee is maintaining regular books of account which have duly been audited. Thus, to say blank letters have been signed, is not correct. It was further contended that the Asstt. CIT(A) in his order under s. 144A has accepted that services have been rendered, as such, relief to the extent of Rs. 60,000 was directed. This fact it was argued proves that the contract was genuine and work has been undertaken by Mr. Ashok Bhardwaj. The contention was putforth that the assessee had offered Mr. Ashok Bhardwaj payment through crossed cheques. However, since he was not an income-tax assessee, he insisted on cash payment. In the said circumstances bearer cheques were issued. It was further contended that the certificate issued by the Manager, Central Bank ofIndia, would clearly indicate that payments have been received by M/s Ashok Bhardwaj & Associates by encashing the cheques and all the cheques have been signed by Mr. Ashok Bhardwaj himself. Reliance was also placed on the statemen....
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....800 are genuine because the same has been admitted to have been received by Mr. Ashok Bhardwaj who has signed the bearer cheques in this regard and on whose letter head bills were raised before the AO. The appellant will get relief of Rs. 1,25,800 in this regard." 8. Aggrieved by this, the Revenue is in appeal before us. 9. Learned Departmental Representative, placing reliance on the assessment order and referring to the paper book filed by the assessee which included the statement recorded by the AO himself of Mr. Ashok Bhardwaj, vehemently contended that Mr. Ashok Bhardwaj has categorically denied that the bills had been signed by him or in fact raised by him. Referring to the same it was contended that Mr. Ashok Bhardwaj in fact stated that he is a habitual drinker and in the said state blank papers had been putforth before him which he had signed without going through their contents. It was further contended that in fact that he has admitted his signatures only on cheque No. 0063, dt.22nd Feb., 1997, and all the others as per his statement had been got signed by him when he was not in his senses. Referring to the statement recorded and relying upon it the learned Departme....