ITO Vs. RAJPAL SINGH

JUDGEMENT

(1.) THESE cross -appeals are directed against Commissioner (Appeals)'s order dated 1 -10 -1996. ITA No. 260/Mum/1997 : (Revenue's appeal) :

(2.) THE following ground of appeal has been raised

(3.) THE grievance of the revenue is against Commissioner (Appeals)'s action in deleting the addition of Rs. 21,54,303 made under section 69C on account of unexplained investment made in the purchases. The assessing officer was of the opinion that the purchases made from M/s Shanti Corpn. amounting to Rs. 20,70,582, M/s Rohitchandra and Co., to the extent of Rs. 80,070 and from M/s Automech, Engg. (P) Ltd., of Rs. 3,651 should be treated as unexplained purchases because the identities of the parties from whom the purchases were made had not been established. The assessing officer observed that against these purchases the assessee had not made any payments as noted from the respective party's ledger account. The assessing officer also detected that the parties to whom the sales have been shown did not confirm the said transactions and the contention that these entries reflected adjustment entries had also not been established as the assessee was unable to provide confirmations. The assessing officer was of the opinion that since the assessee has not been able to prove as to whether he was maintaining any godown wherein the items could be stored, the genuineness of the purchases became doubtful. Accordingly, an amount of Rs. 21,54,303 was treated as unexplained investment of the assessee. Being aggrieved, assessee carried the matter in appeal before the Commissioner (Appeals).