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TMI Blog2006 (1) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... f these, the assessee showed profits in two transactions and loss in the remaining two. The Assessing Officer, in order to verify the genuineness of the transactions resulting in loss, examined the persons concerned and also made further necessary enquiries. On verification, the Assessing Officer found that sales and purchase of rice made by Ram Krishan Dass Narinder Prakash on behalf of the assessee were not genuine and represented a paper transaction only. He, therefore, disallowed the loss of Rs. 86.11 lakhs. Against disallowance of loss of Rs. 86.11 lakhs by the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) but without success as the Commissioner of Income-tax (Appeals) confirmed the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (Appeals) and confirmed the one passed by the Assessing Officer. While setting aside the order of the Commissioner of Income-tax (Appeals), the Tribunal observed thus: "Even during the original assessment proceedings, the assessee could not lead any evidence also whether any payment was made towards advance or commission. Despite this factual position the learned Commissioner of Income-tax (Appeals) entertained the submissions of the assessee that it had actually made the payment to RKDNP. When the statement of Shri Ram Rishan, partner of RKDNP is categorical that no payment is made throughout the year by the assessee and further no evidence was produced before the Assessing Officer either during the original proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en applied in respect thereto. It appears that the very same argument was advanced on behalf of the assessee before the Tribunal also. The Tribunal, however, declined to accept the contention noticing that the Assessing Officer had found specific defects in respect of the entries pertaining to losses, necessitating an enquiry into the two sets of transactions in regard to losses only, while leaving the other part of accounts relating to profits undisturbed. It was observed that since the assessee had voluntarily disclosed the profits on two sets of transactions in its return and the Assessing Officer in his wisdom did not find anything wrong therewith, there was no reason for him to have not accepted the same. We have heard arguments on ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not turn around to question the correctness of disclosure regarding profit-making transactions in its return and that of related entries in respect thereto in its books of account simply because the Assessing Officer doubted the correctness of the two entries pertaining to the loss-making transactions and, consequently, proceeded to make the assessment to the best of his judgment. The books of account or any other material produced before the Assessing Officer by the assessee were simply meant to support the disclosure of profit or loss set out in its return and it was always open to the Assessing Officer to scrutinise such material or entries in the books of account before accepting the same for the purpose of assessment. There is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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