2011 (6) TMI 879

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....4-05. 2. The Revenue has raised following grounds of appeal: "1. Whether on the facts & in the circumstances of the case, the Ld. CIT(A), Amritsar was justified in treating the Debit Note issued on 28.02.2004 as genuine since it was a device to reduce the profits of the assessee concern. 2. Whether on the facts & in the circumstances of the case, the Ld. CIT(A), Amritsar decision is arbitrary since no basis of apportionment of disallowance has been given in his order wherein he computed the disallowance computed at Rs. 20 lakh as against Assessing Officer's disallowance of Rs. 52,35,509/-. 3. Whether on the facts & in the circumstances of the case, the Ld. CIT(A), Amritsar, was justified in law and on the facts....

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....s. Essma Textiles Pvt. Ltd. The assessee filed a copy of debit note dated 28.2.2004 and submitted that M/s. Essma Textile Pvt. Ltd. had raised debit note for the rate difference of the goods sold by the company to the assessee after taking into account the increased price of raw material and increase in the manufacturing cost as agreed mutually. The AO observed that certain bills pertaining to a date later than the date of debit note and the rates were revised with retrospective effect which was a colourful device to adjust the profits of the assessee as the assessee was not bound to pay any further amount once it purchased the goods. Besides, Essma Textiles Pvt. Ltd. was a person specified under section 40A(2)(b) of the Act as the Karta of....

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....less to say that the impugned appellate order is well reasoned and based on the cogent and credible material and facts of the case. However, it would pertinent to reproduce only the conclusive part of the decision of the CIT(A), for the purpose of proper appreciation of the same: "6.2. In view of the above facts and discussion, the excess rate difference charged by way of debit note in respect of purchases works out to Rs. 20,45,578/- (i.e. Rs. 9,34,042/- + Rs. 11,11,536/-). There are certain minor discrepancies as regards rate difference in the chart submitted by appellant as compared to the rate difference mentioned in para 11 of the submissions reproduced in para 5 of the order above. However, since the issue u/s 40A(2)(b) of th....