Y.R. Meena, J. - (1.) THIS appeal is directed against the order dated July 19, 2000. The appeal has been admitted in terms of the following questions : "1. Whether the Appellate Tribunal can make out a new case under Section 68 of the Act treating credit balance in the account of the appellant and making additions accordingly without there being any ground in the appeal ?
(2.) WHETHER the Appellate Tribunal was justified in holding purchase as bogus on the basis of incomplete enquiry report in which the addresses of the purchasers were found to be correct and only because they were not available due to their nomadic characteristic no further efforts were made by the enquiry officer to trace the sellers and enquire about the fact of purchase ? Whether the order of addition passed by respondent No. 3 is vitiated because the principles of natural justice were not followed ?" 2. The relevant assessment year is 1982-83. In the return the assessee declared a total income of Rs. 1,35,653. The assessee-firm is a manufacture of woollen carpets and has its own weaving factory at Jaipur maintaining looms outside Jaipur especially in Tonk District. In the earlier years the assessee showed gross profit at 17.7 per cent. for the assessment year 1979-80, 10 per cent. for the assessment year 1980-81, 9.2 per cent. for the assessment year 1981-82 and in the year under consideration, the assessee has shown 9.04 per cent. gross profit. During the course of assessment, the Assessing Officer noticed that the assessee has shown purchase of wool from various parties, but the payment has not been made and the amount payable to them has been shown as credit in their favour in the books of account. The names of those parties from whom the wool was purchased, rate of purchased wool and total amount expended have been shown in para. 6 of the original order. 3. The Assessing Officer was of the view that the purchases are not genuine and he added Rs. 2,75,000 in the assessment order dated March 6, 1986. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) vide order dated December 6, 1987, set aside the assessment order dated March 6, 1986, with a direction to give opportunity to the assessee to explain the genuineness of the transactions entered into with the parties referred to in para. 6 of the original assessment order. Thereafter again an enquiry was made from the assessee and the assessee was directed to produce those parties or to give the details of those parties, from whom the wool was purchased. Summons were issued to those parties on the given address. One or two parties appeared and considering their submissions, the addition was reduced to Rs. 2,25,000. Again the assessee went in appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) again set aside the assessment order on February 14, 1990, with a direction to make further necessary enquiries. The Assessing Officer in compliance of the direction of the Commissioner of Income-tax (Appeals) deputed the Inspector of Income-tax. The Inspector of Income-tax went and contacted some parties. As per his report, some parties had expired and whereabouts of most of the parties were not available as they belong to Khatic community and Khatics are nomadics. Again opportunity was given to the assessee to produce those parties, and to prove the genuineness of the purchase made from those parties, as referred to in para. 6 of the original assessment order. Many opportunities were given, but the assessee could not produce those parties neither any other evidence was adduced to prove the purchases from those parties. Considering the report of the Inspector of Income-tax and submissions of some parties, who are available, from whom wool was purchased, third time addition have been reduced to Rs. 1,12,500. In the third round before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has deleted this addition holding that when the summons were issued to the parties, who are nomadics and whereabouts are not known to the assessee, the addition was not justified.
(3.) IN appeal before the Tribunal, the Tribunal found that many opportunities were given to the assessee, twice the assessment order was set aside, thereafter, assessments were made one after the other, but in spite of that the assessee failed to prove the genuineness of the transactions or the credits. Therefore, the Tribunal confirmed the addition invoking the provisions of Section 68 holding that once the credit entry has been made in the books of account in the names of various parties and if the genuineness of these cash credits could not be proved, the Assessing Officer was justified in making the addition of Rs. 1,12,500. Heard learned counsel for the parties. Whether the transactions with the parties referred to in para. 6 of the original order are genuine or not, that is basically a question of fact. Three times the assessment has been made to find out as to whether the purchases from the persons referred to in para. 6 are genuine or not. The case of the assessee is that the persons aforestated belong to Khatic community and they are nomadics. In our view it is basically wrong as Khatics not come in the category of nomadics, they have their permanent houses. If for some period they carry their sheep for grazing in some nearby places, they cannot be termed as nomadics and at least it cannot be said that they do not have their permanent houses. On verification it is found that whereabouts of many persons, from whom the wool was purchased are not known. We can understand that they will not be available at one point of time. When the parties from whom the wool was purchased are not nomadics, it cannot be said that they have no permanent address and if they are the genuine parties, they should have some address. No person in the name of such party was found particularly when the summons were issued under Section 131 to those parties. If the transactions are genuine and if the parties have migrated somewhere else, their latest address should have been supplied and the burden is on the assessee to prove the genuineness of the transaction, when the assessee claimed that the purchases are genuine. ;