P.GUPTA, J. - (1.) "In the facts and circumstances of the case, whether the Tribunal could reasonably come to the conclusion that purchases and sales of goods in arhat for the four parties referred to in the order of the Tribunal were benami transactions, merely because sister of one of the partners of the assessee firm was married to one of the partners of another firm when all the parties on whose behalf transactions have been carried out are assessed to tax and these transactions have been accepted and usual charges like as interest, mujduri, commission, godown rent etc. had been charged from the parties in question -
(2.) THE necessary facts are, that the appellant assessee was served with a notice under s. 143(2), in response whereto the assessee produced books of accounts etc., which were examined by way of test check, and it was found, that four transactions of purchase/sale were shown, only for the purpose of diverting a total profit of Rs. 1,94,210 to these concerns, and it was admitted by Anil Kumar, that the four concerns are closely related to the partners of the assessee firm, as one of the partners of these firms is married to his sister, and that from the date of purchase and delivery, the date of sale, the goods shown to have been purchased/sold on behalf of these firms remained in possession of the assessee firm.
(3.) VARIOUS other circumstances were also considered by the AO in regard to various transactions of the four firms, showing as to how the loss was shown to have been suffered by the concerned firm, and thus profit of the assessee firm was diverted. Accordingly, the AO has made addition about the profit diverted. Against this order the assessee filed appeal before the learned CIT, challenging the addition made on account of the profits earned by the Aarhatiya parties. The learned CIT found, after re -examining the books of accounts, and reappreciating the statement, and totality of attending circumstances, that the addition was rightly made, and it was sustained. The learned CIT also considered the aspect about all the four parties being regular dealers, and assessees of income -tax, and having shown the loss incurred to these transactions in the IT returns, which returns have been accepted by the concerned AO. After noticing these contentions, the learned CIT had examined the transactions, and found them to be Benami.;