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TMI Blog2012 (6) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... postal authorities - the said firm was not an existing assessee and the applicant-assessee had failed to produce the said party as also their books of account as the truck numbers given by the applicant-assessee were not truck at all but either scooters, motorcycle and mopeds and many other found to be non-existence because no such number had been allotted by the transport authorities - Section 145 have no application to such a situation as the provision deals with cases where AO is not satisfied about 'correctness' and 'completeness' of the accounts of the assessee and not fraudulent or fabricated entry – against assessee. - IT REFERENCE NO. 105 OF 1997 - - - Dated:- 16-4-2012 - M.M. KUMAR AND ALOK SINGH, JJ. Pankaj Jain for the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stent and accordingly he treated the entire purchases as bogus. On appeal, the CIT(A) held that only part of the purchases could be treated as bogus while the balance purchases, in fact, were made by the applicant-assessee either from M/s Raj Kumar Raghbir Kumar or from somebody else. Accordingly, partial relief was allowed to the applicant-assessee. Both revenue as well as the applicant-assessee filed appeals before the Tribunal and the Tribunal held that the entire purchases of Rs. 5,76,645/- made from M/s Raj Kumar Raghbir Kumar were bogus despite the fact that the CIT(A) had observed that the Assessing Officer had not found any discrepancy in the accounts maintained by the applicant-assessee in the regular course of business. It is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and in such manner as the Income-tax Officer may determine. (2) Where the Income-tax Officer is not satisfied about the correctness or the completeness of the accounts of the assessee, or where no method of accounting has been regularly employed by the assessee, the Income-tax Officer may make an assessment in the manner provided in section 144." 4. A perusal of the aforesaid provision would make it patent that Section 145 deals with method of accounting. However, under Section 145(2) where the Income-tax Officer is not satisfied about the 'correctness' or 'completeness' of the accounts of the assessee or where no method of accounting has been regularly employed by the assessee then the Income-tax Officer may make best judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the truck numbers given by the assessee were not trucks at all but were scooters, motor-cycles and mopeds. Some of the registration numbers quoted by the company were found to be non-existent because no such numbers had been allotted by the transport authorities. It is true that the head-cashier of Union Bank of India in a statement given to the ld. CIT(A) tried to explain the narration given at the back of cheque No. 073353 dated 4.10.1986. It will, however, be straining human intelligence to believe that two parties would come to the bank at the same time when one would be desiring to withdraw a sum of Rs. 69,145/- and the other to purchase a draft of Rs. 34,579/- and that there would be only one clerk looking after two counters of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts. The expression 'correct' is antonymous to the word 'wrong' which would imply erroneous account. The error or wrong might be in a particular entry or in totaling etc. Like 'completeness' is an expression opposite to the word 'incomplete'. Both would not cover a situation like the one in hand. If there is a fraudulent entry or fabricated entry then it cannot be regarded as wrong or incomplete entry. The findings in the present case suggest that the firm M/s Raj Kumar Raghbir Kumar is not in existence. No actual transaction took place. The findings are pronounced and categorical. Therefore, Section 145 of the Act would have no application to such a situation. 7. However, Mr. Jain, learned counsel for the applicant-assessee has sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty as also their books of account. The inquiries made by the Assessing Officer from the transport authorities led to the finding that some of the truck numbers given by the applicant-assessee were not truck at all but either scooters, motorcycle and mopeds and many other found to be non-existence because no such number had been allotted by the transport authorities. Dealing with the statement of the Cashier of the Union Bank of India, our attention was invited to the view of the Tribunal that the narration given at the back of Cheque No. 073353, dated 4.10.1986, was not acceptable. Moreover, it was never ever put before the lower authorities. 9. In view of the above, we answer the question against the assessee and in favour of the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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