R.M.LODHA, J. - (1.) THE only contention raised by the counsel for the appellant assessee company in challenging the order of the Tribunal, Jaipur Bench, Jaipur dt. 10th June, 2002 is that if the Tribunal is held to be justified in making the addition of Rs. 4,37,048 in the hands of the appellant company then the said amount could not have been taxed in the hands of the director Shri Mahesh Toshniwal as was done by the CIT(A) and the Tribunal ought to have, to that extent, modified the order of the CIT(A).
(2.) WE are satisfied that the following substantial question of law arises in this appeal for consideration: Whether Tribunal ought to have clarified in view of its order that the addition of Rs. 4,37,048 has to be made in the hands of the appellant company that the said addition is not taxable in the hands of its director Mahesh Toshniwal as was done by CIT(A) ? The afore -referred question arises in the facts and circumstances which may be briefly noticed by us immediately now. The appellant company is a private limited company. The premises of the company were searched on 8th Jan., 1993 and so also the residential premises of its director Mahesh Toshniwal. During the course of search, the books of accounts of the company were seized which reflected purchases from five parties namely (one) M/s M.P. Electronics Circuits Ltd., New Delhi; (two) M/s R. Prakash Plastics, Delhi; (three) M/s R.K. Electronics; (four) M/s Cosmos Systems and (five) M/s Integral Electronics. The statement of Mahesh Toshniwal, one of the directors of the company was recorded during the course of search. His statement was also recorded under Section 131 thereafter. In both the statements, he was not in a position to explain the source and expressed his willingness to surrender that amount for tax.
(3.) THE AO in his order dt. 26th Dec, 1994 observed thus: 7. From the statement of Shri Mahesh Toshniwal it is clear that purchases of Rs. 4,37,048 from the above mentioned five parties are not genuine. It is also accepted by him that the payment for the alleged purchases have been made, though the. amount are shown outstanding in the books of accounts. Shri Mahesh Toshniwal has also not been able to give any evidence about the purchases from the other parties. There is no evidence about the quantum of money spent for such purchases. The alleged purchases from such unknown parties are totally unvouched. Therefore, no deduction can be allowed to the assessee company on account of the purchases of Rs. 4,37,048 from the abovementioned parties. Regarding the source of the alleged payment to unidentified parties, any evidence of such payments is not available. Though, the assessee has accepted that such payments have been made from unaccounted money but Shri Toshniwal, director of the assessee company is not able to give any evidence that such unaccounted payments were made by him from his own funds. Therefore, as far as the claim of purchases from the above parties are concerned, the same are disallowable in the hands of the assessee company as bogus purchases and added to the total income under the head income from undisclosed sources. He, accordingly, added a sum of Rs. 4,37,048 in the income of the company from undisclosed sources.;