NIZAM WOOL AGENCY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this application filed by the assessee under section 256(2) of the INcome-tax Act, 1961, the following questions of law are sought to be raised :

(2.) QUESTIONS 1 to 5, in effect, pertain only to one issue namely, whether Indian Wool Traders is a genuine concern. The petitioner claimed to have made certain payments to the said entity mostly in cash, some by way of bearer cheques and one payment by way of a crossed cheque. The Income-tax Officer felt a doubt as to the genuineness of the said concern and called upon the assessee to establish its identity and genuineness. It was found by the Income-tax Officer that even the crossed cheque issued in the name of the said concern was really encashed by the partner of the assessee-firm. On a consideration of the material before him, the Income-tax Officer held that it was not a genuine or existing entity. Accordingly, he disallowed the said payments. On appeal, the Appellate Assistant Commissioner agreed with the Income-tax Officer. The assessee wanted to adduce some additional evidence which was not allowed by the Appellate Assistant Commissioner. On further appeal, the Tribunal did allow the assessee to adduce additional evidence. It considered the entire material under a very elaborate order. The Tribunal dealt with each and every circumstance appearing for and against the assessee and concluded that the said concern is neither genuine nor is its identity established. The ultimate finding of the Tribunal is that "Indian Wool Traders was only a convenient facade."