TaxTMI 
TaxTMI 
2025 (8) TMI 382
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....rt, in the case of M/s. South India Surgical Co., Pvt Ltd., vs ACIT in 263 ITR 5, where it was held that a total non-consideration by the appellate tribunal of specific ground raised before it entitles a substantial question of law and the High Court in an appeal u/s 260A of IT Act is entitled to interfere." 3. Though grounds have been taken in relation to two issues, Scheme Deposit Collection and Inflation in purchases/ bogus purchase, we find a single question of law has been raised in regard to both the issues. 4. The first issue relates to scheme deposit collection. In order of assessment dated 12.02.2001, the assessing authority has made an addition of a sum of Rs. 5,57,37,000/- relating to receipts under 'Scheme Deposit' (in short, 'Scheme'/'Scheme Deposit'). 5. The assessee had called-for interest free deposits in multiples of Rs. 3,000/- repayable on demand. In consideration of the deposits, three newspapers were to be given to AIADMK/Namathu MGR party headquarters for circulation to party cadres throughout Tamil Nadu. Opportunities were given to the assessee to produce evidence in regard to the membership of the party cadres and details of the Scheme. 6....
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.....3.1995 which contained 3789 names of the subscribers and the details of dates on which their deposits were made. I have also gone through the bank books and the ledger folios detailing the transactions relating to the scheme deposit. It is pertinent to mention here that when the Appellant had actually furnished the list of depositors, the Assessing Officer should have initiated further investigation process for verifying these deposit transactions, either through summons or through any other mode of enquiry, as was done during the proceedings for the assessment years 1994-95, 1996-97 and 1997-98 earlier. Instead, he has chosen to reject the claim of scheme deposit in its entirety which, in my opinion, was not a correct approach. As a matter of fact, scheme deposit is a common issue for all the assessment years from 1991-92 to 1998-99, and the appeals are pending before me for a decision on this issue. In order to adjudicate upon this issue, I had requisitioned the assessment records including the confidential folders (44 Nos) containing details of investigations made by the Assessing Officer. In the context of assessment year 1996-97 wherein the appellant had claimed to have colle....
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....ble opportunity of being heard. Accordingly, the Assessee's appeals on this issue is allowed for statistical purposes. Since, we have set aside identical issue in the Assessee's appeal, the Revenue's appeals are dismissed.'' 11. The Tribunal has noted that the particulars in respect of all the depositors had been produced. However, the matter was ultimately remanded to the file of the assessing authority with a direction to decide the same after re-investigation of the 41 persons who had denied making the deposits, after giving the Appellant a reasonable opportunity of being heard. The assessee's appeal were allowed for statistical purposes and the appeals of the Revenue were dismissed assailing which the present appeal has been filed by the Revenue. Incidentally, the appeals of the Revenue for the previous and subsequent assessment years have been closed on account of low tax effect. 12. The crux of the submissions advanced on behalf of the Department is that the Tribunal ought to have directed the verification of all the depositors as, according to them, no material was available with the authorities to warrant acceptance of the deposits as projected by the ....
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....indings of the Tribunal extracted supra reveal that there has been application of mind to the facts at issue. 18. We are thus of the considered view that it would be an exercise in futility to confirm the directions of the Tribunal to carry out the investigation now, at a distance of thirty years from the Assessment Year in question. Hence, and instead, we proceed to sustain the addition of 1.5% as per the order of the CIT(A). 19. As far as the Substantial question is concerned, it does not touch upon the merits at all but only agitates the non-consideration of the grounds of appeal raised before the Tribunal. As for that, and as we have already indicated supra, the issue has been considered by the Tribunal that has taken note of the findings of the CIT(A). 20. We have perused the grounds raised before the Tribunal. One of the grounds relates to the alleged lack of opportunity to the Assessing Officer to respond to the additional evidences filed in first appeal. This ground is clearly misconceived as the CIT(A) has forwarded the evidences to the Assessing Officer and sought a remand report thereupon. 21. Hence it is incorrect to state that the Assessing Officer has not ....
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....o appears that summons had been issued by the assessing officer to the eight suppliers of newsprint and it was found that they not only did they exist, but that they were registered with the Sales Tax Department and operated bank accounts. 26. The following particulars figure in the order of the CIT (A): Sales Tax Regn.No Bank A/c With Balaji Traders TNGST No. 041051 Central Bank of India Raja Traders, Chennai TNGST No. 609514 Central Bank of India Karpagam Agencies TNGST No. 034592 Central Bank of India MGK Stores TNGST No. 109082 Central Bank of India Unna Agencies TNGST No. 070282 Central Bank of India Media Traders TNGST No. 119673 Karur Vysya Bank Bright Agencies TNGST No. 000383 Central Bank of India SMRL Paper Company TNGST No. 088910 Central Bank of India 27. Hence the CIT(A) concluded that the suppliers were not fictitious but they were registered Assessee's dealing in newsprint. The CIT (A) also records that the suppliers had brought before the Inspector of the Income-Tax attached to the office of the assessing officer (as he was not available in his office on the date of enquiry....
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....e facts along with the strike orders and the certificates issued by the Registrar of Newspapers of India would go to prove that the purchase transactions involving the above parties, were not bogus......". 29. However, and having stated the above, the CIT (A) sustains 15% of the total cash purchases, for the following reason:- 4.2 ..... Further, the Assessing Officer's decision to restrict the claim of purchases to the extent evidenced in the bank statement i.e., purchase through cheque payments at Rs. 19,39,632/- is not based on legal principles. The Income-Tax Act, 1961 per se never prohibits cash transactions upto certain stated limits. However, for want of verification of purchase rates or even quantities purchased in substantial cash transactions as in the case of the Appellant, the possibility of inflation or excessive claims in purchases cannot be completely ruled out. In this view of the matter, I deem it fit to sustain an addition calculated at 15% of the total cash purchases of Rs. 1,65,65,295/- which works out to Rs. 24,84,794/-. In the result, the balance addition on this account viz. Rs. 1,40,80,501/- (Rs.1,65,65,295 minus Rs. 24,87,784/-) stands delete....