9911796707
TMI Blog2002 (10) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IT Act, 1961. 4. That the business transactions conducted in the normal course of business have been arbitrarily disbelieved. All the comments passed by the AO in support of his alleged additions are based on surmises and conjectures only, without bringing forward even a single evidence on record, to support and substantiate his case. 5. That the appellant craves leave to add, amend or withdraw any grounds or new grounds of appeal before or at the time of hearing/disposal of the appeal." 3. The only grievance of the assessee vide this appeal relates to the confirmation of addition of Rs. 2,26,338. 3.1 The relevant facts relating to the issue in brief are that during the year relevant to the assessment year under consideration, the assessee was engaged in the business of ginning of Narma and trading in Sarson, cotton seeds, etc. The return of income was filed on 16th Nov., 1990, declaring an income of Rs. 1,74,472. During the assessment proceedings, the AO noted that the assessee claimed that the following profits have been earned on behalf of the parties mentioned hereinbelow: "1. M/s Shri Mahalaxmi Poly Plast (P) Ltd. (a) M/s Shri Mahalaxmi Poly Plast (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and cotton weighing 377.36 qtls. amounting to Rs. 6,95,513.80 on behalf of M/s Mahalaxmi Poly Plast (P) Ltd., Muzzafarnagar, and the same were sold at Rs. 1,92,579.16 and Rs. 8,58,206.02 respectively. It was stated that the expenses and interest related to the aforesaid transactions were deducted from that party and the remaining amount was sent through draft. Regarding transactions undertaken on behalf Nimmi Tayal, it was stated that the assessee purchased and sold 224.52 qtls. of cotton seed on her behalf and a profit of Rs. 24,320 was earned which was remitted to her. In respect of Smt. Neeru Tayal, it was stated that the assessee purchased and sold 100 bales of cotton and 90 bales of cotton seed on her behalf and she earned the profit of Rs. 54,337. Similarly, in respect of Smt. Surekha Tayal, it was stated that on her behalf the assessee purchased and sold 221 qtls. of cotton seed and 57 bales of cotton, on those transactions a profit of Rs. 41,809 was earned on her behalf. The assessee admitted that the aforesaid persons could not be produced because all those persons were residents of Muzzafarnagar (UP) and were assessed to income-tax there. However, copies of account from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. She, therefore, refused to consider those additional evidences for the following reasons: "(a) The copies of some affidavits have been submitted which are stated to be filed before the ITO on 4th Jan., 1992. The affidavits are relevant only for being produced before the ITO as at the top of the affidavit it has been categorically mentioned: 'Shreeman Ayakar Adhikari, Abohar (Bhatinda), Punjab ke samakash' These affidavits have not been prepared for being submitted before the CIT(A). The originals were never submitted to the ITO upto the date of assessment and have never been produced during appellate proceedings also before me. (b) The ladies had categorically stated before the Inspector who had been duly authorised to record their statements that they were neither aware of the amount of the profit earned nor aware of the fact where and how any draft was prepared for sending the advance. They did not even know the name of the appellant. Therefore, these photocopies of some alleged affidavits cannot be relied upon, nor can these be admitted as additional evidence." Similarly, the learned CIT(A) had given the following reasons for not entertaining the additional ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional evidence which she ought to accept as per s. 251 of the IT Act which empowered the learned CIT(A) to accept the additional evidences which goes to the root of the issue involved. Accordingly, it was submitted that the learned CIT(A) was not justified in rejecting the claim of the assessee without appreciating the facts on record. 7. In his rival submissions, the learned Departmental Representative strongly supported the orders of the authorities below and also submitted that proper time was given by the AO but the assessee did not co-operate, as such, there was no alternative left with the AO except to make the addition, when the assessee failed to produce the necessary documents in support of its claim. 8. We have heard the learned representatives of both the parties at length and carefully gone through the material available on the record. In the instant case, it seems that the AO has not given due and reasonable time to the assessee to defend its case which is evident from his order sheet placed at pp. 3 to 9 of the paper book. It is evident that on 13th Aug., 1991, Sh. Om Parkash, partner of the assessee, appeared before the AO along with the accountant and the advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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