Ajay Kumar Mittal, J. - (1.) THIS appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 29.4.2013, Annexure A.11 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' (in short, "the Tribunal") in ITA No. 195/CHD/2011 for the assessment year 2007 -08, claiming following substantial questions of law: - "i) Whether under the facts and circumstances of the case, the Tribunal's order is sustainable while making purchase additions, overlooking the provisions of section 145, and returning unreasonable findings being de hors to the 'material facts' containing 'material particulars'? ii) Whether under the facts and circumstances of the case, the Tribunal's conclusions are unreasonable, while passing 'such orders' under section 254(1) without exhibiting the 'application of mind' to the 'material on record' and being even opposite to the assessment order and CIT(A) order?
(2.) A few facts relevant for the decision of the controversy as narrated in the appeal may be noticed. The assessee is engaged in the business of trading of bye -products of rice, phak and nakku. The income tax return was filed at an income of Rs. 1,17,680/ - which was processed under Section 143(1) of the Act. The assessee made purchases during the period from 15.2.2006 to 3.2.2007 from M/s. Luxmi Industries, Saroop Singh Wala Road, Guru Harsahai, District Ferozepur. In consequence of the initiation of the assessment proceedings under section 143(3) of the Act, notice under section 133(6) of the Act was issued on 25.8.2009 through speed post to Luxmi Industries, Ferozepur for explaining the transaction. The said notice was received back with the remarks "Refused to receive" and on 9.9.2009, order sheet entry was made requiring the assessee to produce the creditor with books of account for an amount of Rs. 43,15,660/ - namely Luxmi Industries. Commission under section 131(1) (d) of the Act was issued through letter No.ITO/W -3/PTA/2009 -10/463 to Assistant Commissioner of Income Tax Circle III, Ferozepur requiring verification of the aforesaid amount of liability. Reply was given by the assessee to the effect that Luxmi Industries had been closed since last 6 -7 years and therefore no business was done. Second notice issued to M/s. Luxmi Industries was also received back with the remarks 'refused to take delivery'. The statement of the assessee was recorded in consequence to the notice of final opportunity issued on 20.11.2009 wherein assessee furnished copy of account for the subsequent year ending 31.3.2008. The summons under Section 131 of the Act issued through speed post to Dashmesh Transport Company, Guru Harsahai, calling for books, GR, Book Register for verification were received back with the remarks 'there is no such transport company'. The assessment was completed through order under Section 143(3) of the Act making therein addition for purchases amounting to Rs. 43,15,660/ - and for Rs. 1,95,925/ - towards the freight charges. Aggrieved by the order dated 21.12.2009, Annexure A.3, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 31.12.2010, Annexure A.9, the appeal was allowed. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 29.4.2013, Annexure A.11, the appeal was allowed upholding the assessment order and reversing the findings recorded by the CIT(A). Hence the present appeal by the assessee. Learned counsel for the appellant -assessee submitted following three arguments: - (i)M/s. Luxmi Industries had paid the tax on the said transaction; (ii)Notices were sent to M/s. Luxmi Industries but they refused to accept. Therefore, the said firm was in existence; and (iii)Payments had been made to M/s. Luxmi Industries through cheques.
(3.) ON the other hand, learned counsel for the respondent relied upon decision of this Court in M/s. J.R. Solvent Industries (P) Limited, Sangrur v. CIT, Patiala, ITR No. 105 of 1997, decided on 16.4.2012 to submit that it was a pure finding of fact that no purchases were made from Luxmi Industries, as claimed and, therefore, no substantial question of law arises.;