R.K.AGRAWAL, J. - (1.) THE Tribunal, Allahabad has referred the following question of law under s. 256(2) of the IT Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court: "Whether the Tribunal was in law entitled to confirm the addition of Rs. 89,273 in Chuni -Bhusi account ignoring the fact that complete quantitative account was available before the Tribunal -
(2.) THE reference relates to the asst. yr. 1984 -85.
(3.) BRIEFLY stated, the facts giving rise to the present reference are as follows: The applicant has been assessed to income tax in the status of a firm. It is engaged in the manufacture of gram, pulses, rice, Chuni -Bhusi, etc. While examining the account of the applicant, the AO has noticed that the applicant has made purchases of Chuni -Bhusi from the following parties: Name of Party Bill No. & Date Quantity of Amount Rate Chuni - Bhusi 1. M/s Ayodhya Pd. Gupta, Banda 17A 280.50 28,330.50 @ 01.05.1983 Qtls 101/ - 2. -do - 52B 140.25" 13,744.50 @ 98/ - 24.06.1983 3. M/s Ram Prasad Gupta, Banda 1188 207.00 " 20,079.00 @ 97/ - 09.09.1983 4. Chaudhary Bros. Chuni -Bhusi Nil 04.01.1984 135.00 " 13,095.00 @ 97/ - dealer, Kanpur 5. Pasu Aahar Kendra Chuni -Bhusi Nil 140.25 89,273.00 dealer, Kanpur 903.00 06.01.1984 The AO treated all the above five purchases as bogus. This was done after making enquiries wherein he found that the parties mentioned at Item Nos.4 and 5 never existed. After confronting the outcome of the enquiry to the applicant and considering his reply, the AO had concluded that the purchases are bogus. Further, the persons, namely, Ayodhya Prasad Gupta and Ram Prasad Gupta, happen to be the brother of the partner of the applicant firm and on examination of the records of the said firm it was found that the said two firms have made purchases from Pashu Aahar Kendra and/or Shiva Pashu Aahar Kendra, which firms never existed and, therefore, these purchases were also held to be bogus. The AO had also noticed that there was no proof of transportation of Chuni -Bhusi from Kanpur to Banda. Certain other discrepancies were also found and it was also noticed that the bills of Chuni -Bhusi issued by M/s Ayodhya Prasad Gupta and M/s Ram Prasad Gupta have been prepared by the Munim of the applicant. The ITO had added the entire amount of such purchases in the income of the applicant. Feeling aggrieved, the applicant preferred an appeal before the CIT(A) who has upheld the addition. The second appeal before the Tribunal has failed.;