M.M.KUMAR, J. - (1.) THE assessee appellant has approached this Court by filing instant appeal under s. 260A of the IT Act, 1961 (for brevity, (for brevity, 'the Tribunal') in ITA No. 173/Asr/2003, in respect of asst. yr. 1998 -99. It has been claimed that the following substantive questions of law would arise for determination of this Court : "(i) Whether there is any reasonable legal basis to justify the observation of the Tribunal that purchases made by the assessee from M/s Prem Chand & Co. are not genuine purchases ? (ii) Whether on the facts and in the circumstances of the case, the findings of the Tribunal, upholding the addition of Rs.
(2.) ,12,306 in the total income of the appellant assessee is not based on objective appreciation of facts and perverse in character ? (iii) Whether on the facts and in the circumstances of the case, the Tribunal is justified to uphold the action of authorities below to disallow the purchases and making additions to total income, instead of applying GP rate ? (iv) Whether on the facts and in the circumstances of the case, the Tribunal was justified in upholding the additions made by lower authorities when it was explained that the cash was available for making such purchases and if sales are not ingenuine, the corresponding purchases can also not be disallowed ? (v) Whether the Tribunal is justified in upholding the addition of Rs. 34,000 made by the AO in an arbitrary manner, when the issue was satisfactorily explained ? Whether the judgment given on the issue as such is perverse in nature and liable to be quashed - 2. Facts of the case may first be noticed. The assessee appellant derives income from the business of manufacturing and sale of Ayurvedic and veterinary medicines. He filed his return of income along with P&L a/c and balance sheet on 30th the assessment. The AO after detailed discussion of various statements and verification of record, vide his order dt. 12th same was added to his income. Some more additions on other counts were also made. The total income was assessed at Rs. 6,43,584 and penalty proceedings under s. 271(1)(c) of the Act were initiated for concealing income and furnishing inaccurate particulars of income. It was also held that the assessee was liable to pay interest under s. 234A/B/C of the Act.
(3.) THE assessee appellant then filed an appeal before the CIT(A), Jalandhar, challenging the aforementioned additions. The CIT(A) while upholding the additions of Rs. 2,12,306 and 34,000, partly allowed the appeal granting relief of Rs. 1,92,368 to the assessee appellant. On further appeal by the assessee appellant, the Tribunal also upheld aforementioned additions, vide order dt. 6th authorities cannot be said to have erred in arriving at the conclusion that the entire affairs of M/s Prem Chand & Co. were controlled by the assessee. Shri Prem Chand was found to maintain no office. He was not having any sales -tax number, nor any phone or any bill books were maintained. Also, he was having poor eyesight. All this has been taken to record a finding that he was incapable of doing any business. His statement was recorded, which was riddled with discrepancies. The purchases made by Shri Prem Chand were not verified. His bank account was introduced by the assessee himself. As many as seven deposits and withdrawals stand evidently made on the same date. No business was carried on. Even the consumption of raw material was not verifiable. The onus of proving the existence of M/s Prem Chand & Co. was on the assessee, which was not discharged.;