2015 (5) TMI 76

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aggrieved by the order of Income Tax Appellate Tribunal (hereinafter referred to as the "ITAT") dated 09.05.2014 whereby the Appellate Commissioner's order restricting the addition under Section 41(1) of the Income Tax Act, 1961 to Rs. 28,87,305/- for the Assessment Year (AY) 2003-04 was confirmed. 2. The assessee was engaged in manufacturing and sale of engineering goods comprising railways br....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n had died and, therefore, the business had closed. The AO observed that sum of Rs. 14,11,515/-, Rs. 14,34,586/- and Rs. 3,11,204/- being payable to the three concerns for purchases were outstanding in the year. The assessee was asked, and, it furnished, bills from the parties as also copies of the account. The AO observed that this was outstanding. Taking note of the lack of any response of the t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....son to the last year. Therefore, the purchases made by the appellant should not have been doubted by the A.O. As the appellant had failed to establish the existence of the above mentioned three parties and letter sent to them by the A.0 had been received back unserved, the A.O. should have disallowed the amount outstanding to their credit in the appellant's books and added it to the appellant&....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 6. This Court has considered the material on record. What is apparent is that the AO based its conclusion on the basis of a narrow premise i.e. lack of response by the three parties i.e. M/s A.L. Metal & Methods Pvt. Ltd., M/s Laxmi Enterprises and M/s Komal Forging. The CIT (Appeals) noticed the inherent contradiction in the AO's action - on the one hand, accepting the higher GP Rate, which in....