Mrs. Nurma Rukmangad Bawane, Ichalkaranji V. ITO, Wd.-1, Ichalkaranji

ITA 637/PUN/2010

• Counselvise Citation: 63724514 RSA 2010
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-06-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 23-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Unexplained cash credit; Depreciation; Opportunity of being heard; Question of law; Unabsorbed depreciation
• Section: 40A(3); 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 637/PN/2010 ASSESSMENT YEAR : 1998-1999) MRS. NURMA RUKMANGAD BAWANE, WARD NO. 10, H.NO. 580, ICHALKARANJI. GIR NO./PAN NO : 1542-B/3(8). .. APPELLANT VS. ITO WARD-1,ICHALKARANJI .. RESPONDENT APPELLANT BY : SRI SUNIL PATHAK RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 18-06-2012 DATE OF PRONOUNCEMENT : 20 -06-2012 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 29-12- 2009 OF THE CIT(A), KOLHAPUR RELATING TO THE ASSESS MENT YEAR 1998-99. 2. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR T HE ASSESSEE DID NOT PRESS GROUND OF APPEAL NO. 3 FOR WHICH THE LEARNED D.R. HAS NO OBJECTION. ACCORDINGLY GROUND OF APPEAL NO. 3 IS DISMISSED AS NOT PRESSED. GROUND OF APPEAL NO. 4 BEING GENERAL IN NATURE IS DISMISSED. 3. IN GROUNDS OF APPEAL NOS. 1 AND 2, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CIT(A), KOLHAPUR IN CONFIRMING THE ADDITION OF RS. 6,82,460/- MADE BY THE AO. 4. THIS IS THE SECOND ROUND OF LITIGATION BEFORE TH E TRIBUNAL. FACTS OF THE CASE, IN BRIEF, ARE THAT IN THE ORDER PASSED U/S. 143(3) ON 02-01-2001 THE AO MADE ADDITION OF RS. 6,82,460/- ON ACCOUNT OF UNPROVED P URCHASES IN THE NAME OF M/S. 2 YOGESH TEXTILE TRADERS. IN APPEAL, THE LEARNED CIT (A) DELETED THE ADDITION MADE BY THE AO ON THE GROUND THAT (1) IF THE PURCHASES F IGURE FROM THE ABOVE PARTY IS DISBELIEVED THEN THE PROFIT RATE COMES TO 84.84% WH ICH IS ABNORMAL (2) IF THE PURCHASES ARE TAKEN AS BOGUS THEN THE CORRESPONDING ADJUSTMENT IN CLOSING STOCK AND SALES FIGURES SHOULD ALSO REQUIRED TO BE DONE B Y THE AO, (3) AMOUNTS SHOWN IN THE NAME OF M/S. YOGESH TEXTILE TRADERS MUST HAVE B EEN USED BY THE ASSESSEE TO MAKE THE PAYMENTS OF UNREGISTERED DEALERS AS OBSERV ED BY THE AO AND (4) THERE COULD NOT BE SALES WITHOUT CORRESPONDING PURCHASES. 5. ON FURTHER APPEAL BY THE REVENUE, THE TRIBUNAL V IDE ORDER DATED 21-08-2006 RESTORED THE MATTER BACK TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD T O THE AO AS WELL AS THE ASSESSEE. 5.1 AFTER THE MATTER WAS SET ASIDE BY THE TRIBUNAL THE AO FILED LETTER DATED 24- 11-2009 BEFORE THE CIT(A) WHEREIN HE CONTENDED THAT : I. THE ASSESSING OFFICER HAS NOT MADE ANY OBSERVATI ON THAT THE AMOUNT SHOWN IN THE NAME OF YOGESH TEXTILE TRADERS WAS USED BY THE APPE LLANT TO MAKE PAYMENT TO UNREGISTERED DEALERS. IT WAS ONLY ASSESSING OFFICE RS GUESS AND NOT HIS FINDING BASED ON EVIDENCE/ENQUIRY. II. IT WAS ALSO CONTENDED THAT THE ASSESSING OFFICE R HAD COLLECTED ENOUGH EVIDENCE AND CAME TO THE CORRECT CONCLUSION AND MADE AN ADDI TION OF RS. 6,82,460/-. III. WITHOUT PREJUDICE TO THE ABOVE, THE OUTSTANDIN G CREDIT OF RS. 3,00,510/- STANDING IN THE NAME OF YOGESH TEXTILE TRADERS WAS NOT CONSI DERED AS UNPROVED CREDIT. NO SEPARATE ADDITION WAS MADE TOWARDS THIS OUTSTANDING CREDIT AS ENTIRE PURCHASES WERE TREATED AS UNPROVED. IV. IF IT IS HELD THAT ADDITION ON ACCOUNT OF UNPRO VED PURCHASES WAS WRONGLY MADE, UNPROVED CREDIT NEEDED SEPARATE CONSIDERATION. REGARDING THE CREDIT THE AO MADE THE FOLLOWING OBSE RVATIONS : I. LETTERS SENT TO THE PARTIES WERE RETURNED WITH R EMARKS NOT KNOWN. II. SALES-TAX NO. QUOTED IN THE INVOICE WAS FOUND TO BE THAT OF INDOPLASTICS. III. APPELLANT DID NOT PRODUCE THE SAID CREDITOR F OR VERIFICATION. IV. THE ASSESSING OFFICER EXAMINED THE BANK MANAGER AND PROVED THAT PAYMENTS CLAIMED TO HAVE BEEN MADE BY CHEQUES WERE THROUGH B EARER CHEQUES OR CASH. 3 V. IT WAS ALSO PROVED THAT THE ASSESSEE HERSELF COL LECTED THE PAYMENTS MADE IN THE NAME OF YOGESH TEXTILE TRADERS. 6. IT WAS ALSO SUBMITTED BY THE AO THAT THE PAYMENT S CLAIMED TO HAVE BEEN MADE TO YOGESH TEXTILE TRADERS WERE IN CASH IN EXCE SS OF RS. 20,000/- AND THEREFORE PROVISIONS OF SECTION 40A(3) OF THE I.T. ACT ARE ALSO ATTRACTED. 7. THE LEARNED CIT(A) PROVIDED THE LETTERS SENT BY THE AO TO THE ASSESSEE FOR HER COMMENTS. THE ASSESSEE REITERATED THE SAME ARG UMENTS AS MADE BEFORE THE CIT(A) EARLIER. IT WAS SUBMITTED THAT GROSS PROFIT OF 8.15% DECLARED BY THE ASSESS JUMPS TO 84.84% IF THE PURCHASES FROM YOGESH TEXTIL E TRADERS ARE REMOVED. IT WAS SUBMITTED THAT THE SALES DECLARED BY THE ASSESS EE HAS BEEN ACCEPTED BY THE AO AS WELL AS THE SALES TAX DEPARTMENT. THE PURCHASES FROM YOGESH TEXTILE TRADERS WERE ENTERED IN THE BOOKS OF ACCOUNTS. THEREFORE, IF THE PURCHASES ARE DISBELIEVED THEN THE CORRESPONDING REDUCTION HAD TO BE ALLOWED FROM SALES AND CLOSING STOCK. IT WAS SUBMITTED THAT NO DEFECTS WERE POINTED OUT B Y THE AO IN THE BOOKS OF ACCOUNT. THE GP RATIO DECLARED BY THE ASSESSEE WHE N COMPARED WITH THE GP RATE OF EARLIER YEARS GIVES BETTER RESULT THAN THE EARLI ER YEARS. THE AO HAD NOT DOUBTED THE PURCHASES AS HE WAS OF THE OPINION THAT THE PUR CHASES HAVE BEEN MADE THROUGH URD. 8. HOWEVER, THE LEARNED CIT(A) WAS NOT CONVINCED WI TH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT THE PAYMENTS WER E MADE THROUGH THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED IN CENTRAL BANK OF INDIA AND THE STATEMENT FILED BY THE ASSESSEE AND THE STATEMENT FILED BY THE BANK DID NOT TALLY. THE BANK MANAGER ON OATH ADMITTED HIS INABILITY TO THROW LIG HT ON THE IDENTITY OF THE PERSON COLLECTING THE CASH FROM THE BANK. FURTHER, THE AO ON VERIFICATION HAS FOUND THAT THE PAYMENTS WERE EITHER MADE THROUGH BEARER CHEQUE S OR THROUGH CASH AND TOTAL OF 4 SUCH AMOUNTS CAME TO RS. 3,81,950/-. THE AO HAS FU RTHER NOTED THAT SOME OF THE CHEQUES PERTAINING TO ASSESSMENT YEAR 1999-2000 CLE ARLY INDICATE THAT THE PAYMENTS WERE COLLECTED BY THE ASSESSEE HERSELF. F URTHER, THE ACCOUNT OPENED BY SRI DINESH SARVESHBHAI PATEL, PROPRIETOR OF YOGESH TEXTILE TRADERS WHO OPENED ACCOUNT WITH SHIVAM SAHAKARI BANK LTD. CLOSED THE A CCOUNT ON 06-10-2000 AND IT WAS ALSO OBSERVED THAT THE AMOUNTS CREDITED TO HIS ACCOUNT HAS BEEN IMMEDIATELY WITHDRAWN BY CASH. THE HUSBAND OF THE ASSESSEE WHO HAD SIMILAR BUSINESS WAS FOUND TO BE ONE OF THE DIRECTORS OF SHIVAM SAHAKARI BANK LTD. IT WAS ALSO OBSERVED BY THE AO THAT ALTHOUGH THE SALES WERE PRO VED BY SALES TAX ORDER BUT THE ASSESSEE HAD ACCUMULATED THE STOCK SINCE MANY YEARS AND MADE A FUTILE EFFORT TO INFLATE HER PURCHASES. ACCORDINGLY THE AO REJECTED THE PURCHASES AS UNPROVED. 9. ACCORDING TO THE CIT(A) SINCE THE SALES HAVE BEE N SUPPORTED BY SALES TAX ORDER IT IS NOT FOR THE AO TO REDUCE THE FIGURE FRO M SALES TO ARRIVE AT THE CORRECT INCOME. ALL PURCHASES BEING EXPENSES HAVE TO BE PR OVED BY THE ASSESSEE. SINCE THE ASSESSEE IN THE INSTANT CASE FAILED TO PROVE TH E PURCHASES HE HELD THAT THE AO WAS JUSTIFIED IN REJECTING THE PURCHASES. HE HELD THAT THE CIRCUMSTANTIAL EVIDENCES SHOW THAT THERE WAS A SYSTEMATIC PLANNING TO INFLAT E THE PURCHASES. NO EFFORTS HAVE BEEN MADE BY THE ASSESSEE TO PROVE THE TRANSACTIONS BY WAY OF PRODUCTION OF THE PROPRIETOR OF YOGESH TEXTILE TRADERS BEFORE THE AO. HE ACCORDINGLY UPHELD THE ACTION OF THE AO. SINCE HE CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF PURCHASES BEING BOGUS HE DID NOT CONSIDER THE ALTER NATE CONTENTION RAISED BY THE AO THAT THE UNEXPLAINED CREDIT HAS TO BE CONSIDERED AS INCOME AND THE PROVISIONS OF SECTION 40A(3) BE APPLIED TO PURCHASES AS INFRU CTUOUS. 9.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 5 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE AO AND THE CIT(A) AND SUBMITTED THA T THE IDENTITY OF THE PARTY STANDS PROVED SINCE HE HAS OPENED AN ACCOUNT WITH THE BANK. THE PROPRIETOR OF YOGESH TEXTILE TRADERS MIGHT HAVE SHIFTED TO SOME O THER PLACE FROM BHIVANDI FOR WHICH HE COULD NOT BE TRACED AND THEREFORE THE ASSE SSEE COULD NOT PRODUCE THE PERSON BEFORE THE AO. HE SUBMITTED THAT IF THE PUR CHASES ARE CONSIDERED AS BOGUS, THE GROSS PROFIT RATE COMES TO 84.84% WHICH IS JUST NOT POSSIBLE IN THE BUSINESS IN WHICH THE ASSESSEE IS ENGAGED. HE SUBMITTED THAT T HE PURCHASES ARE MADE FROM A SMALL TRADER AND THE GENUINENESS OF THE SAME SHOULD NOT BE DOUBTED. 11. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HARSH ENGINEERING VIDE ITA NO.720/PN/2001 ORDER DAT ED 03-05-2012 FOR THE BLOCK PERIOD 1988-89 TO 1998-99 HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS ACCEPTED THE PURCHASES WHICH WERE TREATED BY THE AO AS UNPROVED. HE SUBMITTED THAT WHILE DOING SO THE TRI BUNAL HAS FOLLOWED THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOP AL PULSE PROCESSOR PVT. LTD. HE ACCORDINGLY SUBMITTED THAT THE PURCHASES MADE BY T HE ASSESSEE SHOULD BE ACCEPTED AS GENUINE AND NO DISALLOWANCE IS CALLED FOR. 12. THE LEARNED D.R. ON THE OTHER HAND SUBMITTED TH AT THE LEARNED CIT(A) HAS PASSED AN ELABORATE ORDER AFTER CONSIDERING THE REM AND REPORT OF THE AO AND THE COMMENTS OF THE ASSESSEE WHICH IS SELF EXPLANATORY. SINCE THE ASSESSEE FAILED TO PRODUCE THE PARTY FOR THE EXAMINATION OF THE AO AND SINCE THE PURCHASES MADE FROM YOGESH TEXTILE TRADERS REMAINED UNPROVED, THER EFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN UPHOLDING THE ORDER OF THE AO MAKI NG THE ADDITION OF RS. 6,82,460/-. 6 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE HA VE ALSO CONSIDERED THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF HARSH ENGINEERING. THERE IS NO DISPUTE TO THE FACT THAT THE AO MADE AD DITION OF RS. 6,82,460/- ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THE GENUIN ENESS OF THE PURCHASE OF GOODS FROM YOGESH TEXTILE TRADERS AMOUNTING TO RS. 6,82,4 60/- AND ALSO FAILED TO PRODUCE THE PARTY FOR HIS EXAMINATION. IT IS ALSO THE ALLEGATION OF THE AO THAT AMOUNTS CREDITED TO THE ACCOUNT OF YOGESH TEXTILE T RADERS HAVE BEEN IMMEDIATELY WITHDRAWN IN CASH ON THE VERY DAY. IT IS THE SUBMI SSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF THE PURCHASES ARE TREATED AS B OGUS THEN THE GP RATE COMES TO 84.84% WHICH IS NOT POSSIBLE IN THE TYPE OF TRADE I N WHICH THE ASSESSEE IS ENGAGED IN. IT IS ALSO THE SUBMISSION OF THE LEARNED COUNS EL FOR THE ASSESSEE THAT WHEN THE SALES ARE ACCEPTED AND THE BOOKS OF ACCOUNTS ARE NO T REJECTED, THE PURCHASES CANNOT BE TREATED AS BOGUS. FURTHER, IT IS ALSO THE SUBMI SSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF THE PURCHASES ARE TREATED AS BOGU S THEN THE CORRESPONDING ADJUSTMENT TO CLOSING STOCK AND SALES ALSO SHOULD B E REQUIRED TO BE DONE BY THE AO. IT IS ALSO THE SUBMISSION OF THE LEARNED COUNS EL FOR THE ASSESSEE THAT THE PETTY TRADER MIGHT HAVE SHIFTED SOME WHERE FOR WHICH THE ASSESSEE WAS UNABLE TO PRODUCE THE PARTY. 14. WE FIND A SIMILAR TYPE OF CASE HAD COME UP BEFO RE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF GOPAL PULSE PROCESSOR PVT. LTD., (SUPRA) WHERE SIMILAR ADDITIONS WERE MADE BY THE AO FOR PURCHASES MADE FR OM FICTITIOUS CONCERNS. THE LD. CIT(A) DELETED SUCH ADDITION AND THE TRIBUNAL U PHELD THE ORDER OF THE CIT(A) AND DISMISSED THE APPEAL FILED BY THE REVENUE BY HO LDING AS UNDER : 9. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES . THE MAIN EXPLANATION OF THE ASSESSEE WAS THAT DUE TO STRICT PROVISIONS OF I.T.A CT, ASSESSEE WAS EXPECTED TO CONFIRM 7 THE PURCHASES BUT HE WAS HELPLESS DUE TO THE REASON THAT THE PURCHASES WERE MADE FROM THE FARMERS. THOSE FARMERS WERE NEITHER GIVING AN Y AUTHENTIC RECEIPT OF PURCHASE TRANSACTION NOR WERE INCLINED TO APPEAR BEFORE ANY COURT AS A WITNESS OF THE PURCHASE OF AGRICULTURE PRODUCE. SO, THE EXPLANATION OF THE AS SESSEE IS THAT TO OVERCOME THIS DIFFICULTY AND TO SAFEGUARD ITS BUSINESS INTEREST, IN THE ABSENCE OF PROPER CONFIRMATION OF PURCHASES, IT WAS DECIDED TO OPEN BANK ACCOUNT IN T WO NAMES FROM WHOM THE PURCHASE WERE SHOWN IN THE BOOKS OF ACCOUNTS THROUGH PROPER BANK TRANSACTIONS. IT HAS ALSO BEEN ARGUED THAT THIS SHOWS THIS SIMPLE REASON FOR CREAT ION OF TWO ENTITIES. HOWEVER, THERE WAS NO MALAFIDE ON THE PART OF THE ASSESSEE BECAUSE HE HAD TO RECORD THE PURCHASES, OTHERWISE THERE WAS NO JUSTIFICATION OF THE PURCHAS ES SHOWN BY THE ASSESSEE. WE FIND THIS ARGUMENT AND THE EXPLANATION OF THE ASSESSEE Q UITE REASONABLE BECAUSE ONCE THE SALES HAVE NOT BEEN DISPUTED, HENCE CORRESPONDING P URCHASES OUGHT TO HAVE BEEN MADE. INDEED IT IS A MATTER OF COMMON SENSE THAT THERE IS NO POSSIBILITY OF PRODUCTION IF THERE IS NO RAW MATERIAL. WITHOUT INPUT, THERE COULD NOT B E ANY OUTPUT. ADDITIONALLY, THE ASSESSEE HAS ALSO PROVED THAT IF THE PURCHASES ARE NOT TAKEN INTO ACCOUNT, THEN THE RESULTS ARE GOING TO BE UNREALISTIC AND THE G.P. HA D TO GO HIGH RATE AWAY FROM ANY REASONABLE PERCENTAGE. EVEN IF THOSE CONCERNS WER E BOGUS PARTIES, BUT THE BASIC QUESTION IS THAT WITHOUT PURCHASES, THERE CANNOT BE ANY MANUFACTURING OF SALES. AS FAR AS THE ARGUMENT OF THE LD. DR THAT THE ASSESSMENT W AS MAD UNDER CHAPTER XIV B IS CONCERNED, THE ANSWER GIVEN BY LD. AR WAS THAT THE COMPUTATION OF UNDISCLOSED INCOME EVEN OF THE BLOCK PERIOD HAS TO BE MADE U/S. 158BB AND AS PER EXPLANATION ANNEXED TO THIS SECTION, THE TOTAL INCOME OR LOSS OF EACH PREV IOUS YEAR, FOR THE PURPOSE OF DETERMINATION OF UNDISCLOSED INCOME, BE TAKEN AS TH E TOTAL INCOME OR LOSS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND THE ONLY RIDER IS THAT THE SAME SHOULD BE WITHOUT GIVING EFFECT TO SET OFF OF BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION. BY THIS EXPLANATION, THE LEGISLATURE HAS MADE IT CL EAR THAT THE UNDISCLOSED INCOME IS ALSO REQUIRED TO BE DETERMINED OR COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF I.T. ACT, SO THE BASIC PRINCIPLE OF DETERMINATION OF INCOME HAS TO BE FOLLOWED PARTICULARLY IN A CASE WHEN THE INCOME IS OUT OF A TRADING ACTIVITY OF THE ASSESSEE. RELIANCE WAS ALSO PLACE ON THE DECISION OF ITAT BOMBAY IN THE CASE OF BALAJI T EXTILE INDUSTRIES, 49 ITD 177. FURTHER, A RELIANCE HAS ALSO BEEN PLACED ON A DECISION OF IT AT CHANDIGARH BENCH IN THE CASE OF J.R.SOLVENT INDUSTRIES PVT.LTD. V. ACIT (TM) (CHD.) , 68, ITD 65 WHEREIN IT WAS OBSERVED THAT IF ENTIRE PURCHASE WERE TREATED AS BOGUS AND E XCLUDED FROM MANUFACTURING PROCESS, YIELDS RESULTING THERE-FROM WOULD BE ABNORMAL AS CO MPARED TO THAT OF PRECEDING YEARS. THESE ARGUMENTS ARE CONVINCING ESPECIALLY CONSIDERI NG THE SURROUNDING CIRCUMSTANCES, MATERIAL PLACED AND THE CASE LAWS CITED. VIEW TAKE N BY LD. CIT(A) IS HEREBY ENDORSED AND THIS GROUND OF THE REVENUE IS DISMISSED. 15. WE FIND ON FURTHER APPEAL BY THE REVENUE, THE H ONBLE JURISDICTIONAL HIGH COURT DISMISSED THE APPEAL FILED BY THE REVENUE BY HOLDING AS UNDER : 3. WE HAVE CONSIDERED THE SUBMISSIONS ADVANCED BY LEARNED COUNSEL APPEARING FOR THE PARTIES AND PERUSED THE IMPUGNED ORDER. 4. LEARNED SENIOR COUNSEL SHRI P.M. SHAH APPEARING ON BEHALF OF RESPONDENT PLACES RELIANCE ON TWO REPORTED JUDGMENTS IN THE CASE OF V ISHWASRAO MADHAVRAON CHIPULNKAR VS. KAMLABAI VISHWASRAO CHIPULNKAR [2003 (SUPP.2) B OM. C.R. 197] AND GURUDEV KAUR V. KAKAI [(2007) 1 SCC 546] IN SUPPORT OF HIS SUBMISSI ONS THAT UNLESS THE APPELLANT MAKES OUT A SUBSTANTIAL QUESTION OF LAW, THIS COURT NEED NOT ENTERTAIN THE APPEAL AS A COURT OF FACTS. WE HAVE PERUSED THE CASES CITED (SUPRA). 5. WE DO NOT FIND THAT THE APPEAL RAISES SUBSTANTIA L QUESTION OF LAW. THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE ISSUES PROPERLY REGARDING THE 8 PURCHASES AND ENTRIES EFFECTED IN THE ACCOUNTS OF T HE ASSESSEE. WE DO NOT FIND ANY PATENT OR GROSS ERROR FOR CAUSING INTERFERENCE IN T HE IMPUGNED ORDER. THERE IS NO MERIT IN THE APPEAL AND THE SAME DESERVES TO BE DISMISSED. 16. WE FIND FOLLOWING THE ABOVE DECISION THE PUNE B ENCH OF THE TRIBUNAL IN THE CASE OF HARSH ENGINEERING (SUPRA) HAD ALLOWED APPEA L OF THE ASSESSEE BY ACCEPTING THE PURCHASES MADE FROM FICTITIOUS CONCERNS WHICH W AS DISALLOWED BY THE AO AND UPHELD BY THE CIT(A). SINCE THE AO HAS NOT DISTUR BED THE SALES FIGURE AND SINCE THIS IS A VERY OLD MATTER INVOLVING SMALL ADDITION, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION CITED (SUPRA) AND FURTHER CONSIDERING THE FACT THAT DISALLOWANCE OF THE PURCHASES WILL GIVE AN ABSURD RESULT WE SET ASIDE THE ORDER OF THE CIT(A) AND DIR ECT THE AO TO DELETE THE ADDITION OF RS. 6,82,460/-. GROUND RAISED BY THE ASSESSEE I S ACCORDINGLY ALLOWED. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY-ALLOWED. PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE 2012. SD/- SD/- (SHAILENDER KUMAR YADAV) (R.K.PAN DA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED THE 20 TH JUNE 2012 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. ITO WARD 1(2), KOLHAPUR 3. THE CIT(A), KOLHAPUR. 4. THE CIT CONCERNED 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIO R PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE