TaxTMI 
TaxTMI 
2015 (2) TMI 206
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....y seeking answer to the following substantial questions of law: - "1. Whether the order of the ITAT is perverse, in the facts and circumstances of the case, in not deciding the issue of bogus purchases amounting to Rs. 23,37,352/- (i.e. Rs. 18,12,777/- plus Rs. 5,24,575/-) on merits in a case of the assessee claiming audited books of accounts and in directing the assessing officer to work out the income of the assessee by applying net profit rates of 6% compared to 5.48% declared by the assessee itself without controverting the categorical findings of the AO supported with concrete evidence brought on record? ....
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..../- which included income from salary amounting to Rs. 2,64,115/- and profits and gains from business and profession amounting to Rs. 42,34,916/- respectively. The assessing officer made an addition of Rs. 3,59,424/- under Section 40(a)(ia) read with Section 194C of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') for failure to deduct tax on freight and cartage payments made to one M/s V.R.Enterprises. The assessing officer made an addition of Rs. 6,88,326/- on account of payments exceeding Rs. 20,000/- made in cash to Sh.Desraj, M/s Sangam Stone Dust Supplier, M/s Dahia Stone Crusher, M/s V.K.Contractors and M/s Shamsher Singh Grid Supplier. An addition of Rs. 15,87,181/- was made by holding that these purchases were....
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....ls), Chandigarh (hereinafter referred to as the 'CIT(A)' have recorded findings of fact that purchases were made from bogus firms and these facts were verified by the inspector, the onus to prove otherwise lay upon the assessee. A perusal of the record reveals that the assessee was unable to adduce any evidence much less prove the existence of the firms from whom he had allegedly purchased material. The Tribunal has rejected the addition made on account of bogus purchases without assigning any reason and while referring to the amount of Rs. 5,24,575/-, which it deleted, abruptly directed the assessing officer to compute the income of the assessee at a net profit rate of 6%. The Tribunal ignored the absence of any explanation relatin....
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....ment by adding Rs. 18,12,777/- which included Rs. 5,24,574/-. After holding as above, the Tribunal proceeded to deal with the matter regarding the bogus bills and held that the assessing officer did not make any inquiries as to the status of the assessee as at best he made general inquiries regarding the non-registration of the supplier with the Sales Tax Authorities and the Pollution Control Board and thereafter abruptly and without assigning any tangible reason, directed the assessing officer to apply a net profit rate of 6% to workout the income of the assessee and deleted all additions. We are of the considered opinion that the impugned order suffers from a fundamental flaw. The Tribunal ignored the evidence relied by the assessing o....
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....ove parties on the mentioned addresses. Then I contacted Mr. Tarsem, who is working in M/s R.K. Trading Co. since 2005. He told me that he had not heard any of the above mentioned names of these firms. Then I contacted Mr. Jai Ram of M/s Rekhi Stone Crusher, Burj Kotian, Chandimandir, he told me that he is working as foreman for the last 6 or 7 years and he had also not heard any of these firms. I also contacted Mr.Vinod Kumar who is working as Munshi for the last 10 yrs in M/s Hargobind Stone Crusher, Burj Kotian, Chandimandir, Distt. Panchkula (Haryana), Mr.Raju, who is working as Chowkidar in M/s Janta Woshing Plant and Mr.Suresh, who is working for the last 8 years in Bhiwani Stone Crusher, Chandimandir. Who also told me that these firm....
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....sessee that they were present on-site is not also acceptable. It is also worth mentioning that notices u/s 133(6) of the Income Tax Act, 1961 for furnishing of information were also sent to the above mentioned concerns requiring them to provide a copy of the ledger of M/s Harsoria Construction Co. These letters returned to the office undelivered." The Tribunal, however, has not dealt with this aspect nor has it chosen to record any opinion on the failure of the assessee to produce these parties or to prove their existence or to rebut the report prepared by the inspector but abruptly directed the assessing officer to apply a net profit rate of 6%, without assigning any ostensible reason. The Tribunal having ignored relevant facts, i....