2009 (1) TMI 89 - HC - Income Tax

Bogus Purchase - It is an admitted position that the present appeal arises out of common order of Tribunal dated 26.10.2007 in case of the present assessee and one Smt. Nirikesha N Patel, both for Assessment Year 2003-2004. Hence, for the sake of brevity, it is not necessary to repeat the facts and contentions in detail, except for taking note of the fact that the amount in dispute in the present appeal is a sum of Rs.47,32,090 - Appeal is dismissed

Issues:
1. Amendment of proposed questions in the memorandum of appeal.
2. Confirmation of view by ITAT regarding purchase expenditure.
3. Directions given to the assessing officer by ITAT.
4. Perversity in the decision of ITAT.
5. Disallowance of purchase expenditure by ITAT.
6. Granting deduction for purchase expenditure.
7. Common order of Tribunal for two different assesses.
8. Dismissal of the appeal.

1. Amendment of proposed questions in the memorandum of appeal:
The learned advocate for the appellant sought permission to amend the proposed questions in the memorandum of appeal, which was granted. The appellant had initially proposed three questions, and later two additional questions were incorporated. This procedural aspect was duly addressed by the court.

2. Confirmation of view by ITAT regarding purchase expenditure:
The primary issue revolved around the confirmation of the view taken by the ITAT concerning the appellant's entitlement to the full amount of purchase expenditure recorded in its books of accounts. The ITAT's decision in this regard was under scrutiny, questioning the correctness of the interpretation of law by both the ITAT and the CIT (A).

3. Directions given to the assessing officer by ITAT:
Another aspect of the case involved the directions given by the ITAT to the assessing officer to take the peak and make additions. This direction raised a legal question regarding the proper application of the law and the correctness of the ITAT's directive in the given circumstances.

4. Perversity in the decision of ITAT:
The appellant contended that the decision of the ITAT was perverse for various reasons, including the lack of independent findings and the failure to consider all details submitted before the Tribunal. The issue of perversity in the ITAT's decision was raised, questioning the adequacy and correctness of the decision-making process.

5. Disallowance of purchase expenditure by ITAT:
The ITAT disallowed the purchase expenditure amounting to a specific sum, treating it as bogus despite corresponding sales being accepted for tax. This raised a legal question regarding the justification and legality of disallowing the purchase expenditure based on the Tribunal's reasoning.

6. Granting deduction for purchase expenditure:
The ITAT's decision not to grant a deduction for purchase expenditure when the material was purchased from one source and the bill was obtained from another was also challenged. This issue raised concerns about the legality and correctness of denying the deduction based on the source of the bill.

7. Common order of Tribunal for two different assesses:
The judgment noted that the present appeal arose from a common order of the Tribunal for two different assesses for the same assessment year. The court acknowledged this commonality and decided not to repeat the facts and contentions in detail, streamlining the proceedings for efficiency.

8. Dismissal of the appeal:
Ultimately, the appeal was dismissed for reasons similar to another case involving a different assessee. The court referred to an order of the same date in a related case and decided to dismiss the present appeal based on similar grounds, thereby concluding the legal proceedings in this matter.

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