SURYA KANT, J. - (1.) BY this petition under s. 256(2) of the IT Act, 1961 (for short 'the Act'), the Revenue seeks a direction to the Income -tax Appellate Tribunal (for short 'the Tribunal'), Amritsar Bench, Amritsar, to state the case and refer the following questions deciding cross -appeals, ITA No. 1425 of 1989 (by the Revenue) and ITA No. 1332 of 1989 (by the assessee) : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming first appellate authority's order deleting the addition of Rs. 1,48,93,286 made on account of bogus purchases ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming first appellate authority's order in deleting the addition of Rs. 35,47,867 made in the trading account by invoking provisions of s. 145 (2) of the IT Act, 1961 ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing triple shift allowance on machinery ignoring the fact that machinery did not work for triple shift -
(2.) BRIEFLY stated, the material facts which pertain to the asst. yr. 1986 -87 and have given rise to this petition, are as follows. 2a. The assessee is a private limited company engaged in the business of manufacturing and sale of various types of search and seizure operation under s. 132(1) of the Act was carried out at the business premises and the residential the Department, the AO suspected that the purchase of gun metal scraps valuing Rs. 1,48,93,286 from seven parties, accounted for in its account books by the assessee, was shown by it in collusion with those parties. The AO accordingly Enterprises and M/s Swami Enterprises, first two of the seven parties referred to above. The assessee responded vide its 2,10,63,154 on the ground that there were bogus purchases to the tune of Rs. 1,48,93,286 and addition of Rs. 35,47,867 in the trading account, apart from some other inadmissible items of expenses.
(3.) AGGRIEVED , the assessee preferred an appeal before the CIT(A) who accepted the assessee's case in part and held that its books of account were fully verifiable, therefore, s. 145 of the Act need not have been invoked. The CIT(A) also held that the basis of treating the purchases from seven scrap dealers as bogus, was wrong as the consumption stood fully proved and the existence of parties could not be denied. He also upheld the basis of valuation of closing stock of work - the additions of Rs. 1,48,93,286 and Rs. 35,47,867 made by the AO on account of bogus purchases and additions in the trading account besides allowing 'triple shift allowance' on machinery, etc., as also some other reliefs on other accounts. The Revenue and the assessee, both, went in appeal before the Tribunal, who vide its self -speaking order dt. 31st expenditure incurred by the assessee on staff/labour welfare and on account of guest -house expenses, were vacated by the Tribunal.;