TaxTMI 
TaxTMI 
1979 (6) TMI 77
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....assessee for the asst. yr. 1973-74 is directed against the order of the learned AAC confirming the order of the ITO passed under s. 143(3). 2. The assessee is a registered firm carrying on business of manufacturing of steel furnitures such as almirahs, tools etc. The sales are mostly to different Government agencies. During the year under consideration the assessee disclosed a sum of Rs. 28,483 in its return of income. The ITO after scrutiny of the account made on total addition of Rs. 29,200 in respect of inflation of purchases and unproved transport charges. Against this order of the ITO the assessee appealed before the learned AAC. The learned AAC confirmed the disallowances made by the ITO and dismissed the appeal. Being aggrieved wi....
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....een the figures mentioned in the bill No. viz-a-viz the cash book. In response to the show cause notice the assessee in its letter dt. 9th Sept., 1976 stated that the purchases indicated in the goods account as well as in cash book were correct and no alteration or over-writings were ever made. The ITO has also taken statements of the three partners on solemn affirmation at the time of assessment proceedings and in their statements all the three partners pleaded ignorance of purchases having been shown at inflated figures and denied that none of them had altered the figures in the purchase memos. In view of the defects detected by the ITO the explanations of the assessee and its three partners were rejected by the ITO and the entire amount ....
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.... by the lower authorities should be deleted. 5. Shri S.M. Khade, the Departmental Representative submits before us that this is a case where the assessee had deliberately inflated his purchases in order to bring down the net profit. No-where either in its reply or in the statement of the three partners it was ever stated before the ITO that this was on account of on money paid on purchases made by the assessee during the year. The argument put forward by the learned counsel of the assessee is an after thought. It is submitted that even if this relate to on money the assessee could have claimed separately. The claim of allowing on money as a deduction is a separate question. In this case the assessee had inflated the purchases by making a....
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....ring the year because of the fact that the materials so purchased during the year were scare in the market. The learned counsel has not brought out any evidence before us to prove this point in respect of this scarcity of material. On the face of the alteration in the purchases memos produced by the assessee before the ITO there is no doubt that the assessee had deliberately inflated the purchase amount in order to reduce the profit. The question of allowing deduction in respect of payment of on money in this case does not arise. It is true that the payment in respect of on money cannot be supported by any evidence. In other words, there cannot by any direct evidence in support of payment of on money. In such cases it is the duty of the ass....