CIT vs. METAL ROD LTD

a #L o/o.t6.O9.ZOLL Present: Mr. N.P. Sahni, Sr. Standing Counsel for the Revenue. +ITA No.1O86/2O11 x In the assessment year passed by the Assessing Officer for the assessment year 1998-99, the AO made three additions/disallowances, which are as under: 1. Addition of t25,84,299/- on account of unexplained purchases made by the assessee company from M/s' Sain Dass Gupta & Co. 2. Addition of <13,45,387/- on account of clearing and forwarding charges pertaining to bill raised in the name of M/s. Sain Dass Gupta & Co. 3. Disallowance of <32,928/- on account of travelling expenses of the Director of the assessee company. Insofar as the first two additions are concerned, they pertain to one transaction, viz., purported purchase made by the assessee from M/s. Sain Dass Gupta & Co. because the explanation furnished by the assessee that these are the goods imported by M/s. Sain Dass Gupta & Co. and high seas sales made by the said seller to the assessee. Since the AO was suspicious about the genuineness of the sales, he asked the assessee to produce the said seller. Summons under Section 131 and 133 (6) of the Act were also issued, but seller did not attend the proceedings before the AO. : Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified

D Further, as per the Ao, the assessee even showed his inability to give the assessment particulars to the said seller on these grounds, the AO did not accept the aforesaid purchase as genuine and made addition. As the assessee had also shown clearing and forwarding charges pertaining to the same consignment imported in the name of M/s. Sain Dass Gupta & Co., for some reason that expenses were not allowed and addition made. These additions were sustained by the CIT (A). However, the Income Tax Appellate Tribunal had deleted both these additions accepting the sale by M/s. Sain Dass Gupta & Co. to the assessee as genuine. For arriving at this conclusion, the ITAT has taken into consideration the following material documents: 1. The assessee is in the business of non-ferrous metal on high seas sales on this item is normal feature in this business. 2. The payment was made by the assessee to M/s. Sain Dass Gupta & Co. through cheques, which was duly cleared. 3. The assessee also produced invoices, complete details of the container number, shipping company with whom the goods were chartered and invoices raised by the seller and other details.

t f,I The goods were also shown in the stock register of the assessee. Goods were even sold by the assessee and the payment received. The sale was accepted by the AO' In view of the above, we are of the opinion that the view taken by the Tribunal returning the finding of fact that the sale in question is genuine on the material on record and cannot be said to be perverse. w€, thus, do not find any error insofar deletion of the aforesaid two additions are concerned' Likewise, in respect of third addition, which is in the sum of R32,9 2B/- on account of travelling expenses of the Director of the assessee company, the Tribunal has returned the finding that the expense was, in fact, incurred on travelling in the course of business affairs of the assessee company. Therefore, we are of the opinion that no question of law arises, this appeal is accordingly dismissed' SIDDHARTH MRIDUL, J. SEPTEMBER L6,2OLL Dmc D