COMMISSIONER OF INCOME TAX Vs. FANCY INTERNATIONAL
HIGH COURT OF DELHI
COMMISSIONER OF INCOME TAX
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(1.) 'F' ('Tribunal') in ITA No. 472/Del/2003 relevant for the asst. yr. 1997 -98.
(2.) THE assessee is a 100 per cent export unit dealing in garments. The assessee had claimed certain expenditure towards fabrication charges. The AO issued summons under s. 131 of the IT Act,1961 to 74 parties to whom the
assessee claimed to have made payments towards fabrication charges. 17 of the summons came back with the report
that such persons were not found existing at the given address. When asked to produce these persons, the assessee
stated that the matter was 3 -4 years old and the parties may have shifted or gone out of business during this period. It
was also submitted that the payments were made to all those persons through account payee cheques and that there
was a strict gate pass and challans system which was being adhered to. Therefore, according to the assessee, the
fabricators were genuine. Since the assessee was unable to produce them, he requested the AO to depute a person to
trace out the parties.
(3.) THE AO apparently did not take any steps to trace out the parties but added an amount of Rs. 43,15,352 paid to the fabricators as income from other sources. Feeling aggrieved, the assessee preferred an appeal which was allowed by the
CIT(A). A further appeal filed by the Revenue was dismissed by the Tribunal and that is how the Revenue is before us.
It is submitted by learned counsel for the Revenue that the burden was on the assessee to prove the genuineness of the parties to whom fabrication charges were alleged to have been paid.;
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