CIT-VII Vs. MIS GREYSHAM & CO.

JUDGEMENT

(1.) THE Revenue is 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 break system and components thereof for the Indian Railways and wagon builders. All the sales by the assessee are made to the government agencies such as Indian Railways and coach factories. The G.P Rate declared by the assessee in the A.Y. 2003 -04 was better in comparison to that in the immediately preceding assessment year. The Assessing Officer (AO) in order to verify purchases made by the assessee made enquiries during the assessment proceedings by sending notices to three parties. These parties did not respond and assessee by letters in response to enquiry submitted that two of the suppliers were duly registered with Excise and Sales Tax Department and appeared to be genuine parties. As far as confirmation of third vendor is concerned, assessee informed that the proprietor of the concern 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 three parties, the AO disallowed as unverifiable amount, a sum of Rs. 76,39,453/ -. On appeal, the CIT(Appeals) took into consideration the materials and granted partial relief to the assessee in the following terms:

(3.) THE ITAT has merely confirmed the above conclusion.