2009 (12) TMI 942

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..... the order of the Tribunal sustaining the order of the CIT(A) cancelling addition in assessment on account of bogus purchases to inflate purchase cost and also addition made on account of unexplained trade credits. 2. We have heard standing counsel appearing for the Revenue and counsel appearing for the respondent/assessee. 3. The assessee was a dealer in scrap items viz., copper, brass, lead .....

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..... ts. Consequently, this amount was added to the income under s. 68 of the IT Act. 4. Before the first appellate authority, the assessee contended that there was no purchase inflation and shortage of stock noticed by the officer is on account of wastage of materials, which got included while purchasing scrap. Similarly, addition under s. 68 was considered by the first appellate authority as the o .....

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..... t the shortage in stock is on account of waste materials like gunny bag and impurities found in metal scraps etc. It is the second explanation that found acceptance with the first appellate authority and the Tribunal. As already stated, the assessee is a dealer in scrap metals like copper, aluminium etc., the value of which is incomparably higher than the value of gunny bag and other impurities et .....

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..... no justification to the first appellate authority and the Tribunal to accept the alternate explanation based on assessee's claim. We therefore allow the Department's appeal on this issue by reversing the order of the Tribunal, confirming the order passed by the first appellate authority and by restoring the assessment. 6. The next question raised pertains to the addition on credit entri .....

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..... Department has accepted the same, we set aside the orders of the Tribunal and the first appellate authority and remand the matter to the AO for consideration of the same. If in the subsequent year, the creditors are identified and payments were made by the assessee and the same was accepted by the Department, the addition made under this head i.e., ₹ 3,11,146 will be deleted. The appeal i .....

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