TaxTMI 
TaxTMI 
2000 (11) TMI 281
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....e into consideration the assessee's explanation before investigation wing and AO and relied on statements which are far from truth (ground No. 3). (2) The facts as per the record in nutshell are that M/s Devi Silks, M/s Sri Ranga Silks and M/s Devi Ranga Silks, the assessees herein, are partnership firm formed by weavers as its partners, all situated at the same premises. They purchase silk fabrics from the weavers and sell these in other states on credit basis. There was a search on 9th Oct., 1990, by the Department wherein a stock of fabrics valued Rs. 59,07,946 was found at the premises, details of which are as under: Rs. (1) Devi Silks 14,41,565 (2) Sri Ranga Silks 4,80,245 (3) Devi Ranga Sarees ....
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....fied. Against this order of the CIT(A) now the Department, has come in the second appeal before us. 3. Sri Ramesh, the learned Departmental Representative while reiterating the grounds of appeals banks upon the order of the AO. Sri Lakshminarasimhan, the learned authorised representative on the other hand, submits that all the three assessee-firms are located in the same premises but they are having different partners and they all are dealing in sarees. He submits further that the business of all the three firms are divisible and identified; statement of Sri Vasanthkumar has no corroboration, there is no validity of the statements recorded under s. 132(4) of the Act and refers the decision of the Allahabad High Court in the case of Pu....
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.... Regarding the statement of Sri L. Vasanthakumar, it appears from the record that he was the partner in two firms viz., M/s Devi Silks and M/s Sri Ranga Silks only but he had given statements even for M/s Devi Ranga Sarees after taking assistance from Sri L. Anantha, partner of M/s Devi Ranga Sarees. We agree with the submission of the assessee that statements of Shri L. Vasanthakumar were not binding on M/s Devi Ranga Sarees and we find that his statement lacks corroborative evidence as furnished on behalf of the assessee-firm regarding the payments made for purchase which was originally on approval basis. No convincing reason has been furnished by the AO to disbelieve this material fact that in the silk fabric business it was customary to....
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....e haste and due care and caution was not bestowed in passing the order" whereas the assessment orders under appeals were passed on 20th Dec., 1993, after giving adequate and sufficient opportunities by the AO, as can be seen from the records that the hearings/correspondence, etc. had taken place from 14th June, 1993 to 20th Dec., 1993. It can be, thus, seen that there is no merit in the plea of the appellants' representative as regards the plea of adequate opportunity not being given to the appellants. The assessment year involved for all the three firms is 1991-92 (1st April, 1990 to 31st March, 1991). The search was commenced on 9th Oct., 1990, and completed on 28th Nov., 1990. The entries were made about the business transaction in th....
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....count of a lurking doubt in his mind that the payments for the purchases on "approval basis" were made on 15th Sept., 1990. In other words, the payments were preceded by the purchases. This doubt is dispelled by the fact brought out to my notice by the representative on behalf of the appellants that the payments were made only on 13th Oct., 1990, as against 15th Sept., 1990, wrongly presumed by the AO. All these additions fall like a pack of cards on account of misunderstanding on the part of the AO. The facts brought out by the representative has been completely verified and found to be correct with reference to the relevant documents, records and bank statements. Therefore, there is no substance or merit for the conclusion arrived at by t....
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....f the cheques, he readily admitted that there were full and complete signatures of the drawees (creditors/weavers) with the bank authorities. Therefore, the presumption and assumption of the AO are shattered by corroborative evidence brought out clearly by the representative on behalf of the appellants. 4. Regarding the second donation of Rs. 20,20,595 the AO solely relied on the statements recorded from Shri L. Vasanthakumar. Sri L. Vasanthakumar is the partner in the first two firms, viz., M/s Devi Silks and M/s Sri Ranga Silks. However, he gave the statement even for the firm, M/s Devi Ranga Sarees after taking assistance from Shri L. Anantha, who is the partner in M/s Devi Ranga Sarees. At the very outset, it should be mentioned here....