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TMI Blog2016 (7) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... stion in favour of the assessee - Tax Appeal No. 1278 of 2006 - - - Dated:- 8-6-2016 - KS Jhaveri And G. R. Udhwani, JJ. For the Appellant : Mr SN Divatia, Advocate For the Respondent : Mr Varun K. Patel, Advocate JUDGMENT ( Per Honourable Mr. Justice KS Jhaveri ) 1. By way of this Appeal, the Appellant has challenged the judgment and order dated 19.05.2006 of the Income Tax Appellate Tribunal, Ahmedabad Bench in ITA No.2729/Ahd/2000. 2. While admitting the matter on 11.05.2007, the following substantial question of law was framed by the Court for consideration :- Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was right in law in confirming the addition of ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessity to raise funds through discounting of fake bills and such a practice was akin to inflation of stock given to bank for raising higher finance. Therefore, the respondent made an addition of ₹ 6,95,310/- as suppressed sales in respect of the difference between the sales of ₹ 16,13,472/- to AS and ₹ 9,18,162/- as sales to ATPL. Being aggrieved by the order of assessment, the appellant preferred an appeal before the CIT(A)- I, Ahmedabad who vide order dated 12.10.2000 deleted the impugned addition for the reasons stated in para 9 of the order. The CIT(A) has given a clear finding that the perusal of books of accounts of ATPL showed that they had purchased 3000 kg of yarn from ASL for ₹ 3,15,157/- on 20.08.1996 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded in books but that to ATIPL as in (2) was not recorded in books. 4. The appellant had no yarn as opening stock nor any purchase of yarn was made during the year. 5. The appellant had discounted the bills dated 13/3/97 and 20/3/97 in the name of ATIPL, a sister concern. 6. The appellant paid ₹ 6,63,799/- on 14/3/97 to ATIPL and ₹ 9,15,085/- on 21/3/97 to Saurashtra Ginning in the course of business. Thus the observation of the Assessing Officer on page 8 of the order is not correct that the appellant did not use the fund for business purposes. 7. The appellant has been regularly discounting bills for raising funds on genuine sales. 8. The Assessing Officer did not confirm from ATIPL whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,310/- being difference of ₹ 16,13,472/- (alleged sale to ATIPL) and ₹ 9,18,163/- (genuine sale made to ASL), is deleted. There will be relief of ₹ 6,95,310/-. Learned Counsel for the appellant has relied on the decision of this Court in the case of Commissioner of Income-Tax v. Samir Synthetics Mills reported in [2010] 326 ITR 410 (Guj) wherein the Commissioner (Appeals) found that the assessee failed to explain the suppression of production of fabrics and also held that any addition that was to be made was not in respect of the sale consideration but only in respect of the profit. The Commissioner (Appeals) reduced the addition made by the Assessing Officer. The Tribunal concurred with the Commissioner (Appeals) a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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