COMMISSIONER OF INCOME-TAX Vs. BRIJ PAL SHARMA

JUDGEMENT

(1.) THROUGH the instant appeal, the appellant has raised the following questions of law: (i) Whether on the facts and in the circumstances of the case, the IT AT is right in law in confirming the order of Ld. CIT(A) deleting the addition of Rs. 1,29,316 made on account of bogus liability, disregarding the fact that cash payments below Rs. 20,000 were made on different dates and the assessee failed to produce the creditor, who was stated to have left from his place? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal is right in law in affirming the decision of the Ld. CIT(A) in deleting the addition of Rs. 4,00,000 made by the Assessing Officer under Section 40A(2) on account of truck hire charges, holding that the Assessing Officer had not demonstrated in what manner the charges were excessive, disregarding the fact that the charges were paid to the assessee's son at rate per trip instead of normal practice of monthly rent? (iii) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal is right in law in affirming the decision of the Ld. CIT(A) in deleting the addition of Rs. 17,70,339 made by the Assessing Officer on account of bogus liability in the account of M/s. Anuj Construction, disregarding the fact that the liability was created in a period of last three months of financial year, and the assessee failed to produce the creditor for verification?

(2.) ON the first question, it would be pertinent to mention that a sum of Rs. 1,29,316 paid by cash by the respondent -assessee as tractor charges was ordered to be deleted by the Assessing Officer on account of the fact that the assessee had failed to produce either the creditor or any other material to establish that the aforesaid cash payment was made by the respondent -assessee towards tractor charges. The aforestated determination of the Assessing Officer was set aside by the Commissioner of Income -tax (Appeals) vide his order dated 14 -9 -2004 and affirmed by the Income -tax Appellate Tribunal vide its impugned order dated 23 -11 -2007. On the second question, the Assessing Officer ordered a deletion from out of the machinery hire charges paid to M/s. Satyen Enterprises by asserting that the same were on the higher side by invoking Section 40A(2)(b) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'). The instant deduction was also set aside by the Commissioner of Income -tax (Appeals) vide his order dated 14 -9 -20Q4, which was affirmed by the impugned order passed by the Income -tax Appellate Tribunal dated 23 -11 -2007. Insofar as the third question is concerned, the Assessing Officer arrived at the conclusion, that a sum of Rs. 17,70,339 paid to M/s. Anuj Construction was a bogus liability created by the respondent -assessee at the end of the financial year. The aforesaid amount was deleted from the expense incurred by the respondent -assessee as the respondent -assessee had failed to produce the creditor or verifiable material to establish the aforesaid liability.

(3.) WE have also considered the issue pertaining to the deduction of Rs. 1,29,316. The solitary contention of the learned Counsel for the appellant before us has been, that the non -production of the aforestated Dharminder at the hands of the respondent -assessee was vital to the issue in hand. It was also submitted by the learned Counsel for the appellant that there was no reason for the Assessing Officer to summon the aforesaid Dharminder on account of the fact that the respondent -assessee had himself expressed in his letter dated 26 -3 -2004, that Dharminder was not available.