Delhi High Court

Dy. Cit vs Durant Refrigeration (P) Ltd. on 19 December, 2003

Equivalent citations: (2004) 90 TTJ Del 1130

ORDER

Smt. Diva Singh, J.M.:

This is an appeal filed by the revenue against the order dated 1-2-1999, of Commissioner (Appeals)-I, New Delhi, pertaining to 1995-96 assessment year.

2. The grounds raised by the revenue read as under :

"On the facts and in the circumstances of the case, the Commissioner (Appeals) has erred both on facts and in law in allowing 100 per cent depreciation of Rs. 14,14,000 on 505 gas cylinders despite the fact:

(a) that the assessing officer had clearly established through detailed investigation that the assessed had never purchased such gas cylinders;

(b) that the alleged seller of such gas cylinders namely Sh. A.S. Choudhry had admitted in his statement that he had signed a false affidavit in which it was claimed that the said gas cylinders were sold to the assessed- company."

3. The relevant facts of the case are that the assessed filed its return declaring an income of Rs. 57,953. The assessing officer observed that the assessed had claimed that it had purchased 505 oxygen gas cylinders @ Rs. 2,800 each from M/s. Puja Gases Ltd. for a total consideration of Rs. 14,14,000. These cylinders subsequently were allegedly leased to M/s. Hotz Industries (P) Ltd., a sister-concern of the assessed. On these gas cylinders, the assessed claimed 100 per cent depreciation.

4. The assessing officer, in this background, required the assessed to prove the genuineness of the purchase of these cylinders. In support of its claim, the assessed filed the following evidences :

(i) Copies of 3 bills of M/s. Puja Gases for the purchase of 505 gas cylinders Rs. 2,800 each.

(ii) Copies of three delivery challans issued by Puja Gases for these 505 gas cylinders.

(iii) A letter dated 9-10-1997, from Puja Gases certifying that 505 gas cylinders were sold to Durant Refrigeration (P) Ltd. and also certifying that payment of Rs. 14,14,000 was received from M/s. Durant Refrigeration vide cheques drawn on ABN Amro Bank, Parliament Street, New Delhi.

(iv) Copy of affidavit signed by Sh. A.S. Chowdhry, Prop. of Puja Gases stating that he had sold 505 gas cylinders to the assessed.

(v) Copy of lease agreement with M/s. Hotz Industries (P) Ltd. regarding lease of 505 gas cylinders.

(vi) Copy of bank account of the assessed- company with ABN Amro bank from where the payment of Rs. 14,14,000 has been made to M/s. Puja Gases."

5. The assessing officer, in order to verify the genuineness of the evidences taking note of the address given on these bills as U.G.F.-69, Palika Bazar, G.T. Road, Ghaziabad-201001, sent registered letter dated 15-9-1997, calling for information under section 133(6). The said letter came back unserved with the comment "there is no firm of this name on the above address". The assessing officer intimated the said information to the assessed vide letter dated 1-10-1997, Along with a show-cause notice as to why the said transaction should not be held to be a bogus transaction in view of the fact that the existence of M/s. Puja Gases could not be proved.

6. The assessed vide letter dated 15-10-.1997, gave the following reply

"The assessed- company checked up with 368, Pandu Nagar,

Ghaziabad, UP, under intimation to assessed- company."

7. The assessing officer, to verify the assessed's claim, along with the Inspector Mr. R.L. Sardana, visited the original premises at 69, UGF, Palika Bazar, Ghaziabad, where they found a firm by the name of M/s. Mittal Pharma who claimed to have been operating from the said premises. The statement of Mr. N.K. Mittal, Prop.of M/s. Mittal Pharma was recorded on 20-6-1998, who stated that he was in possession of the said premises since June 1993 and he had taken the possession of this shop from one Col. Baswan of Meerut and he had not heard of any M/s. Puja Gases. He further stated that as far as he knew, no one was operating from the said premises since December, 1991. Apart from this, enquiries were made by the Inspector from the taxi stand at Ghanta Ghar (Near Railway Station), Ghaziabad, from the "police station near the Old Bus Stand of Ghaziabad and from various advocates operating from Tehsil Compound, Ghaziabad about 358, Pandu Nagar, Ghaziabad. Accordingly, from these enquiries, it was concluded that there is no such address as 358, Pandu Nagar, Ghaziabad. The assessing officer brought these facts to the notice of the assessed vide letter dated 21-1-1998, and again, he was issued show-cause notice as to why the said transaction be not treated as a bogus transaction. In response, the assessed contended that in view of the fact that it had filed bills as well as delivery challans of M/s. Puja Gases on the date of transaction, the action of treating the same as a bogus transaction was ill-conceived and without any justification. The assessed also filed a photocopy of the bank statement showing clearance of the cheque in favor of M/s. Puja Gases. It was also stated that these cylinders were given on lease to M/s. Hotz Industries as per the photocopy of the agreement which has been filed before the assessing officer earlier and even the lease rentals received by them have been duly declared by them in the P&L a/c. It was also stated that one Shri Satinder Choudhry was running this business in the name and style of M/s. Puja Gases. The said person, expired in May 1997 and the firm was thereafter closed as his father Shri Amar Singh Choudhry was too old to carry on the business. The assessed-company gave another address of M/s. Puja Gases as "Amar Singh Choudhry, C/o Shiva Tempo Transport, 358, Pandav Nagar, Near Atma Steel, Bulandshar Industrial Area, Ghaziabad. " The assessing officer observed that the assessed has failed to produce Shri Amar Singh Choudhry in person. In view of the fact that the assessed had given another address, the assessing officer gave another opportunity to the assessed to produce Shri Amar Singh Choudhry in person for examination. In response to this, the assessed filed its reply dated 19-2-1998, enclosing the medical certificate of Shri Amar Singh Choudhry as well as his original affidavit attesting the sale of gas cylinders to the assessed- company by his son Shri Satender Choudhry. It was further stated in the said letter that in view of the instant documents being filed as well as the earlier documents already filed, it was considered that sufficient evidence to prove the purchase of gas cylinders had been placed. At paras 5 & 6 of the assessment order, the assessing officer makes the following observations :

"5. A statement was then recorded on oath of Sh. A.S. Choudhry at Ghaziabad on 19-3-1998, which is placed on record. Sh. Amar Singh Choudhry admitted in his statement that he was the proprietor of M/s. Puja Gases but that the concern was being run by Sh. Satinder Choudhry who died on 13-5-1997, (Answer to 0. No. 2). He has stated that after the death of his son in May, 1997, the business was closed down. The other relevant extracts, which form the basis of discussion later, are being produced below for a quick reference

Q.7 What type of business was being carried out by Puja Gases?

Ans. This firm was doing business of gas cylinders.

Q.8 What type of gas cylinders? Was it a mfg. unit or was it doing a trading of gas cylinders?

Ans. I am not aware. My son was involved in business activities. I do not know what type of business he was doing.

Q.9 Do you know about the transactions made by Puja Gases with M/s. Durant Refrigeration (P) Ltd.?

Ans. I do not know. My son was looking after the affair of business.

Q. 10 You have given an affidavit that 505 gas cylinders amounting to the tune of Rs. 14,00,000 approximately were sold to M/s. Durant Refrigeration (P) Ltd. vide Bill Nos. 251, 252 & 253 on 3-3-1995 and 6-3-1995. When you do not know about business affairs, how you have given the affidavit to the department?

Ans. I again affirm that I do not know. This was got signed by Mr. R.P. Bhatia who was from Durant Refrigeration (P) Ltd. Since I am very shocked due to death of my son, I signed the affidavit.

Q. 11 Did you purchase the affidavit?

Ans. No, I did not purchase any affidavit in my name. It was purchased by Durant people.

Q. 12 Do you maintain any bank a/c ?

Ans. No, I do not have any bank account as on date.

Q. 16 There are deposits/withdrawals of more than Rs. 1 lac and up to Rs. 9 lacs approx. Do you know the nature of such deposits/withdrawals, i.e. from/to whom such cheques were received/given.

Ans. I do not know about these transactions. I signed blank cheques and gave to Sh. R.P. Bhatia.

Q. 18 Were any books of accounts being maintained by Puja Gases, or there was any accountant/CA/advocate/manager of this firm? Please also state your salestax number.

Ans. No, there was no such employee. I have also no sales-tax number.

Q.19 If you have supplied/sold the cylinders, please supply the G.R./L.R./ Transporter Bill or any other documents to authenticate the movement of cylinders from Ghaziabad to Delhi.

Ans. I have no such records/documents.

Q.21 Do you recollect having sold/supplied gas cylinders to any other company other than M/s. Durant Refrigeration (P) Ltd.?

Ans. No, I have not sold any cylinder to any other party."

6. Further enquiries were also made from the Trade Tax Officer, Ghaziabad, regarding the sales-tax number appearing on the bills raised by M/s. Puja Gases. The Trade Tax Officer, Sector-4, Ghaziabad has replied vide his letter dated 25-3-1998, that M/s. Puja Gases were indeed allotted U.P. S.T. No. GD 0271063 dated 30-4-1988 and that the business of M/s. Puja Gases was dealing in Oxygen Gas (and not Oxygen Cylinders). However, he has stated that M/s. Puja Gases last filed their Form No.4 (Sales-tax return) for the (financial year 1992-93) assessment year 1993-94 at Nil amount and that no return has been filed after financial year 1992-93 till date. This report of the Tax Officer, Sector 4, Ghaziabad has been filed and forms part of assessment record."

8. From the above, he concludes that the assessed has made a fictitious claim and has tried to defraud the Government and has evaded lawful taxes of Rs. 14,14,000. The reasons for not accepting the assessed's version were firstly the signature of Shri Amar Singh Choudhry obtained on his statement recorded on oath on 19-3-1998, match with those on the confirmation letters dated 9-10-1997 and also with the affidavit dated 5-3-1998, but not match with the signatures on the bills and delivery challans. Accordingly, it was concluded that the bills and delivery challans were fake.

9. Secondly, he was of the view that M/s. Puja Gases has not paid any sales-tax since 1992-93 and had also vacated premises at 69, UGF, Palika Bazar, Ghaziabad, in December, 1991. The issue of sales bills from the same premises in March 1995 bearing the caption "tax paid" could not be treated to be genuine.

10. Thirdly, the assessing officer was of the view that Shri Amar Singh Choudhry has categorically stated in his statement that he had no idea of business activities of M/s. Puja Gases. Although he was the proprietor, the actual business was conducted by Shri Satinder Choudhry who expired in May 1997. He was also of the view that Shri Amar Singh Choudhry was also vague about the affidavit given by him at the behest of Shri R.P. Bhatia.

11. Fourthly, he was further of the view that M/s. Hotz Industrie's being a sister concern of the assessed-company, it was convenient for the directors to draw up a collusive lease agreement where no actual transaction of lease took place.

12. Finally, the amount of Rs. 14,14,000 though duly transferred from the assessed's bank account to that of M/s. Puja Gases, he was of the view that its real purpose remained vague because amount credited was immediately withdrawn by way of cash signed cheques signed by Shri Amar Singh Choudhry. Shri Amar Singh Choudhry in his statement had confirmed signing blank cheques handed over to him by Shri R.P. Bhatia. In this background, the assessing officer was of the view that the defunct concern, i.e., M/s. Puja Gases was used as a conduit in the assessed's attempt to evade taxes by claiming bogus depreciation on bogus purchase by taking advantage of an old man like Shri Amar Singh Choudhry and possibly alluring him with some easy money in the form of commission.

13. Aggrieved by this, in appeal before the first appellate authority, it was contended on behalf of the assessed that throughout the country, there was a short supply of gas cylinders vis-a-vis the demand and accordingly, there was a secondary market in the second-hand gas cylinders. It was further stated that the secondary market is so wide and so spread out that it is a normal trade practice to deal through the brokers. It was stated that this fact was confirmed by Shri Arun Kumar Jain, working director of the assessed- company and his oath was recorded before the assessing officer, It was further contended that this fact had not been appreciated by the assessing officer and referring to the same, it was pointed out that in fact a complete reading of the assessment order would show that it is full of contradictions and based purely on conjectures and surmises. It was further stated that the statement of Shri Amar Singh Choudhry recorded by the assessing officer is also full of contradictions. It was also pointed out that the assessing officer has concluded that there was no business being conducted by M/s. Puja Gases which fact it was agitated was contradictory. Referring to the facts of the case, it was pointed out that it has not been appreciated that the transaction in this trade took place through brokers and there was no interaction between the buyers and the sellers. It was further pointed out that in a simple business transaction there was no need for the buyer to personally meet the seller. The buyer is only interested in its payment. Referring to the instant case, it was pointed out that the gas cylinders were actually received and the payment was made by account-payee cheque which was issued in the name of the seller and also cleared through its bank account. It was pointed out that this was a normal business transaction and not a loan transaction. As such, it was not material for the parties concerned to verify the antecedents of each other as to whether the other is assessed to levies and taxes under the law of the land or not. It was also pointed out that the assessing officer has relied on the statement of Shri Amar Singh Choudhry wherein Shri Choudhry had not denied the existence of the firm M/s. Puja Gases nor has he denied the sale transactions of his son who was looking after the said concern. However, this fact has not been appreciated by the assessing officer. It was also contended that at the time of transaction Shri Satinder Choudhry was alive and was in full charge of activities of M/s. Puja Gases. In the circumstances, it was stated how Shri Amar Singh Choudhry could state that Shri R.P. Bhatia was once an employee of the assessed-company. It was further pointed out that in fact the assessing officer in para. 6 of his order has stated that enquiries from the sales-tax authorities in Ghaziabad have confirmed that M/s. Puja Gases did exist and sales-tax number was also allotted to it. Thus, it was stated that if subsequently M/s. Puja Gases failed to file its sales-tax return, the assessed could not be faulted with this fault. With regard to the emphasis laid by the assessing officer on the signature on the bills/delivery challans being different from the signatures on the statement and affidavit of Shri Amar Singh Choudhry, it was stated that it is quite possible that the signatures on the bills and delivery challans were those of his son who according to Shri Amar Singh Choudhry himself was running the whole business. It was also stated that it was possible that the son was doing business in the name of his father as Benami so as to avoid payment of income-tax/sales-tax. Thus, it was questioned in this background the assessed could not be held responsible for the misdeeds of the third parties. With regard to the emphasis laid by the assessing officer in para 11.3 of his order that there was close proximity between the assessed and Shri Amar Singh Choudhry, it was stated that the assessed was all along trying to trace the proprietors of M/s. Puja Gases through the concerned broker for the department. The statement recorded of Shri Mittal, proprietor of M/s. Mittal Pharma and the statement of the local enquiry of Inspector which has been relied upon by the assessing officer, it was stated that these were never confronted to the assessed. Considering these submissions, the Commissioner (Appeals) deleted the addition in the following manner :

"3.9 On a careful consideration of the facts of this matter, I must say that the statement of Shri A.S. Choudhry, as recorded by the assessing officer on 19-3-1996, is not without contradictions and vagueness. The authroized representative's argument is that what we are looking at is just a normal business transactions as different from a loan/deposit transaction and it was not essential for the parties to verify the antecedents of each other. The goods have actually been received and paid for by an account payee cheque which has been cleared through the bank account of the party. Sh. Choudhry has asserted that his son, when alive, was in full control of the business of the company, Puja Gases.

Hence, the evidence weighs in favor of the appellant and I hold that the transaction involving purchase of gas cylinders for Rs. 14,14,000 is a genuine transaction and the claim of the appellant-company should be accepted."

14. Aggrieved by this fact, the revenue is in appeal before us.

15. Learned Departmental Representative Ms. Prabhjot Kaur quoted at length from the various observations made by the assessing officer with regard to the efforts of the assessing officer made in order to verify the genuineness of the claim of the assessed. Relying heavily upon the assessment order, it is argued by the learned Departmental Representative that in the peculiar facts of the case, the assessing officer vide para 3 of his order looked behind the documentation relied upon by the assessed in support of its claim. Referring to para 4 of the assessment order, it was pointed out by her that as per the address appearing on the bill book and the delivery challans for the financial year 1995-96, the assessing officer under section 133(6) sent letters to verify the genuineness of the purchase entered upon by the assessed against which 100 per cent depreciation has been claimed. In response to this, the letters came back unserved with the comments "there is no firm of this name on the above address". It was pointed out that the assessing officer did not conclude the issue here and gave another opportunity vide letter dated 15-10-1997, to the assessed. He, as per para 4.3, visited the original address appearing on the bill book/delivery challans on which he found M/s. Mittal Pharma whose proprietor Mr. N.K. Mittal stated on oath that he has been in possession of the said premises since June, 1993 and he has never heard of M/s. Pooja Gases and in fact had taken the possession of the premises from one Col. Baswan of Meerut and that he had not heard of any M/s. Pooja Gases. Accordingly, she stated that the assessed was required to produce in person the proprietor of M/s. Pooja Gases. It was further pointed out that at this stage, the assessed came up with the third address namely "Shri Amar Singh Choudhry, C/o Shiva Tempo Transport, 358, Pandav Nagar, Near Atma Steel, Bulandshahr Industrial Area, Ghaziabad." Much emphasis has been laid on the fact that the person Shri Amer Singh was not brought on record by the assessed and the address given by the assessed was not the address appearing on the bill book or delivery challans. The assessed also placed on record the affidavit of Shri A.S. Choudhry. In the circumstances, the assessing officer proceeded to take the statement on oath of Shri A.S. Chaudhry and from the extract reproduced in the assessment order it was sought to be established by her that the affidavit relied upon by the assessed of Shri A.S. Chaudhry is, in fact, self-serving document prepared by the assessed. Much emphasis has been laid at question 8. Referring to the contradictions in the statement of Shri A.S. Chaudhry, it was pointed out that in fact Shri A.S. Chaudhry clearly states that he does not know anything about the business. Questions 10 & 11 were specially emphasized as it was contended that if as per the statement on oath of Shri A.S. Chaudhry the business was run by his deceased son and he does not know about income, then how could he give an affidavit which has been relied upon by the assessed to support the genuineness of the sale of gas cylinders. Thus, it was argued that the affidavit is a self-serving document. It was further argued by her that even here the assessing officer did not conclude the issue. He got enquiries made from the trade tax authorities and found that the said concern had existed and had also been allotted a specific sales-tax number and had filed its sales-tax return up to the financial year 1993-94 at nil and thereafter, no further returns were filed. Thus, the question of supposed purchase by the assessed from the said concern of gas cylinders does not arise. Accordingly, in the circumstances, the assessing officer was justified in rejecting the assessed's claim. Difference in signatures accordingly noted by the assessing officer on the bill book/delivery challan and affidavit was highlighted. Referring to p. 9, it was argued that as per the statement of Shri A.S. Chaudhry, the concern M/s. Puja Gases had no employee, CA or an advocate. The transaction, it was argued, in the circumstances, was rightly treated by the assessing officer as bogus. Emphasis has been laid upon the fact that the assessed's concern and the Hotz Industries were sister-concern having common directors and a common address. As such, the documentation to justify its claim could easily be furnished, the fact that payment of M/s. Puja Gases had been made by cheque, it was argued, by itself does not prove the genuineness as cash has immediately been withdrawn thereafter. Thus, in view of the stand taken by the assessed that Shri A.S. Chaudhry was too old to move, it was stated, the statement of Shri A.S. Chaudhry was recorded at his premises by the assessing officer. Paras 11.2 and 11.3 of the assessment order were emphasized. Para 13, it was argued, shows that the assessing officer had treated the lease rentals as income from other sources on protective basis. Referring to para 13.5 of Commissioner (Appeals)'s order, it was argued that the relief had been given by the Commissioner (Appeals) in a very casual manner. He has merely observed that there are certain contradictions in the statement dated 19-3-1998, relied upon by the assessing officer who has treated the same as vague.

16. On the basis of the above submissions, it was contended that the impugned order deserves to be set aside and the assessment order deserves to be upheld.

17. Learned authorized representative Shri Salil Agarwal, appearing on behalf of the assessed, on the other hand, placed heavy reliance upon the impugned order. Inviting attention to the submissions made by the assessed before the Commissioner (Appeals) recorded at pp. 13 to 17 in paras 3.6 to 3.8, it was contended that the assessed has met each and every observation of the assessing officer. It was pointed out that the assessed has referred to the background of the case and submitted that at the point of time when the gas cylinders were purchased and leased, there was a regular and booming market of second hand gas cylinders in view of the fact that the supply could not keep pace with the demand of the same. Referring to the same, it was pointed out that the secondary market/grey market is so widespread that it is a normal trade practice to strike a deal through brokers and in such a situation, the two parties concerned, i.e., the buyer and the seller do not in fact come in contact with each other at all as the buyer is interested only in the commodity which he is setting out to purchase and the seller is only interested in ensuring that he receives - payment for the goods sold. Thus, in a transaction between two strangers in order to secure their respective interests, it is considered safe to deal through brokers. Referring to the submissions made before the Commissioner (Appeals), it was pointed out that simply because M/s. Puja Gases has been found not to file its sales-tax return beyond a certain period, the, assessed cannot be saddled with that shortcoming. Referring to the documents available on record, it was pointed out that it is an undisputed fact that Shri Satinder Choudhry S/o Shri Amar Singh Choudhry, proprietor of M/s. Puja Gases was running the business of the firm M/s. Puja Gases on behalf of his father and the said son died some time in May 1997. Thus, on the date when the assessing officer sent the registered letter dated 15-9-1997, to the address given in the bills/delivery challans, i.e., UGF-69, Palika Bazar, G.T. Road. Ghaziabad, which came back unserved with the comment "there is no firm of this name on the above address". It was stated that by then, Shri Satinder Choudhry no longer existed as he had died in May, 1997. Referring to the suspicion on the part of the assessing officer that the assessed is coming up with different addresses when he is required to produce the proprietor of M/s. Puja Gases, it was stated that no doubt at the time of purchase the assessed did not make any efforts to find out anything about M/s. Puja Gases as his sole interest was in acquiring gas cylinders, however, when the assessing officer put him on notice that on account of non-production of the proprietor of the said concern, the assessed would be adversely effected, he made all-out efforts to trace the whereabouts of the said concern. In this background, whatever information he came across through his broker or any other source, he placed it before the revenue with the bona fide belief that the adverse inference drawn by the assessing officer will be negated. It was argued that the assessing officer instead of appreciating the efforts made by the assessed has looked at the efforts of the assessed to trace the whereabouts of M/s. Puja Gases with suspicion. It was pointed out that in fact, the attitude of the department could be seen from the efforts made by the Inspector to find out the whereabouts of the firm where he tries to trace the address of M/s. Puja Gases from the Taxi Stand at Ghanta Ghar, Ghaziabad, from the police station, Ghaziabad and even the advocates operating from Tehsil compound, Ghaziabad and the only place where he could have obtained the requisite information and, in fact, where he necessarily should have made efforts, he has scrupulously attempted not to go to that authority, i.e., the postal authorities. It was pointed out that if the department was serious in tracing the whereabouts of the said concern, then what was stopping the inspector from approaching the postal authorities and obtain the necessary information as to whether a particular address existed or not. Without paying much attention to that, it was pointed out that even then when the assessed was confronted with the said facts, the assessed obtained the affidavits and the medical certificate for not producing the said proprietor Mr. Amar Singh Choudhry who had lost his son and was an aged man with medical conditions. The revenue, it was argued, instead of appreciating the efforts of the assessed decided to ignore the same based on suspicion that the assessed has supposedly maintained relations with the said concern. It was pointed out that it has never been the case of the revenue that M/s. Puja Gases in any manner is even remotely linked to the assessed. Looking at the background of the case, it was pointed out that in the case of shortage of requisite gas cylinders, the person seeking to buy them gets in touch with a broker to purchase the same and if the said concern from whom the gas cylinders are purchased has been found wanting in fulfillling any requirement under any law, then how can the assessed be saddled with the shortcomings of the third parties. Referring to the facts of the case, it was pointed out that in fact the assessing officer in the course of his efforts has obtained information that M/s. Puja Gases was an emsting concern as far as sales-tax purposes are concerned and had been allotted a specific number. The only aspect is that after a certain period, the said concern did not file its sales-tax returns. Inviting attention to para 6 of the assessment order, it was pointed out that M/s. Puja Gases last filed their Form No. 4 (sales-tax return) for the assessment year 1993-94 at nil amount and that no return had been filed after financial year 1992-93. It was pointed out that the fact that the person taking care of M/s. Puja Gases passed away in May 1997 could be a possible reason why the said concern did not file its sales-tax return because then, the said concern obviously did not function. Whatever may be the possible reasons, it was argued, the assessed cannot be held answerable for this lapse if at all. Reverting to the facts, it was pointed out that on the date the transaction took place, i.e., in 1995, Shri Satinder Choudhry was very much looking after the business of M/s. Puja Gases and was very much alive. Referring to the observations of the learned Departmental Representative that the addition has been deleted in a casual manner observing that there are contradictions in the statement of Shri Amar Singh Choudhry, it was pointed out that the assessed has made various submissions before the Commissioner (Appeals) which have been reproduced in the impugned order. Attention was also invited to various pages in the paper book in support of the assessed's contention. Specific attention was invited to the written submissions filed before the Commissioner (Appeals). Copy of statement of Shri Arun Kumar Jain and statement of Shri Amar Singh Choudhry was also referred to. It was pointed out that undue emphasis has been laid by the assessing officer on the same in view of the fact that again and again, Shri Amar Singh Choudhry has stated that he does not know anything about the transactions of M/s. Puja Gases which were being looked after by his son.

18. Having heard the rival submissions and perused the material placed oil our files, we are of the view after a careful perusal of the same that with regard to the peculiar facts of the case, there is sufficient force in the arguments of the learned authorized representative inasmuch as in the case of a transaction of purchase, it may not be necessary to come in direct contact with the seller to the extent that when a party enters into a transaction to purchase a certain commodity which the seller possesses, then the buyer does not necessarily considers it prudent to find out the antecedents of the seller to the extent that his status of complying with sales-tax authorities and other authorities. A purchaser is only interested that the seller is in a position to deliver the goods required by the purchaser or not. The question of requiring the seller to give details of his compliance with various sales-tax, etc., laws does not arise. We are unable to come to a finding that the purchaser is required first to ascertain the status of the compliance with sales-tax, etc., before entering into the transaction of purchase with the seller of the commodity and only then can the genuineness be proved. We find ourselves unable to come to such a finding in the absence of any legal mandate to this effect. However, this is not to say that the assessing officer is to accept the transaction as genuine with his eyes closed. The assessing officer is required to ascertain the genuineness and is required to verify the claim put forth by the assessed. However, in the peculiar facts and circumstances of the case, it is seen that since the assessed had been put to notice that in the eventuality of non-production of the proprietor of M/s. Puja Gases, he would be adversely affected. Taking note of this fact, we are unable to agree with the arguments advanced on behalf of the revenue that the assessed has come up with addresses of the proprietor of M/s. Puja Gases and, as such, may have remained in touch with it. It is humanely not an impossible situation, in fact, it is a necessary consequence of an adverse inference that a person affected by it would make all possible human efforts to give necessary particulars so as to ensure that for want of necessary information, he is not adversely affected. Thus, the bona fide efforts of the assessed do not give rise to any suspicion in our minds. Such efforts cannot be brushed aside holding that the assessed has been in consistent touch with the said concern as this would be entering into realm of conjectures and surmises. Coming to the affidavit in support of the assessed's claim filed by the assessed obtained from Shri Amar Singh Choudhry and statement recorded by the assessing officer dated 19-3-1998, which has been given a greater preference by the revenue, we are of the view after a careful analysis of these two documents in the background of a peculiar case that there is no dispute that the business of M/s. Puja Gases was taken care of by Shri Satinder Choudhry who passed away in May, 1997. The transaction took place in 1995. Accordingly, at the time when the enquiries were made by the assessing officer and efforts were made by the assessed to trace the proprietor, by then, Shri Satinder Choudhry had already expired. The fact that Shri Amar Singh was an old broken man after the death of his son and suffering from various medical conditions is also a matter of record not disputed by either side. The fact that in the affidavit Shri Amar Singh Choudhry accepts that the transaction with the assessed-company is genuine and in the statement recorded Shri Amar Singh Choudhry has said that all transactions of M/s. Puja Gases were done by his son, thus the case which the revenue has tried to make out is that Shri Amar Singh Choudhry was not qualified even to make the statement in the affidavit that the transaction is genuine. We are of the view that undue importance to the said statement in the peculiar facts and circumstances of the case is not warranted. If for a moment, it is assumed that Shri Amar Singh Choudhry was not qualified to even make that statement, then this fact even by itself does not advance the case of the revenue in view of the fact that as per the categoric observations of the assessing officer himself the signatures of Shri Amar Singh Choudhry as appended in the affidavit and the statement match. However, the signatures appearing on the bills/challans are different. Much emphasis has been laid upon the said fact by the revenue. Appreciated in the proper context, it is seen that al the consistent stand of the revenue and the statement recorded on oath of Shri Amar Singh Choudhry as well as the affidavit placed on record by the assessed rings consistently with one refrain, i.e., the business of M/s. Puja Gases was being done by Shri Satinder Choudhry on behalf of the proprietor Shri Amar Singh Choudhry. In fact, the father Shri Amar Singh Choudhry has himself stated that even the cheques, etc. were signed by him without knowing anything about the business of M/s. Puja Gases. Thus, in this background, it is seen that as far as the assessed is concerned, it has purchased the said goods from M/s. Puja Gases. The bills/challans have not been signed by the proprietor Shri Amar Singh Choudhry but by the son who was looking after the said concern on behalf of his father which fact the revenue and the assessed accept in common.

19. Thus, even if the contradictions in the affidavit and the statement are ignored which has been the reason for giving relief by the Commissioner (Appeals) according to the revenue, even then the fact emerges that the proprietor whose signatures are not on the bills/challans was ignorant of the working of M/s. Puja Gases as such his evidence in favor of the assessed or against the assessed is of no consequence as he contradicts himself but the fact remains that in both these documents one of which the assessed wants to rely and one on which the revenue wants to rely, it is an accepted fact that the proprietor was ignorant of the transactions of M/s. Puja Gases. The fact remains that M/s. Puja Gases had been allotted a specific sales-tax number. The fact remains that payment was made by cheques. The fact also remains that the transaction is between unrelated parties and the fact also remains that when the transaction was entered and completed, the person running the business of M/s. Puja Gases was very much alive and, in fact, which is why the signatures on bills/challans do not match the signatures on the affidavit and the statement.

20. Thus, after a careful analysis of entire facts and circumstances of the case, we are of the view that the suspicions and inferences drawn by the assessing officer on the facts of the case are not justified and the Commissioner (Appeals) on the basis of the detailed submissions recorded in the impugned order came to the correct finding which, for the detailed reasons given hereinabove, are upheld by us. Accordingly, we are of the view that there is no reason or basis to allow the grounds raised by the revenue which accordingly are dismissed.

21. In the result, the appeal filed by the revenue is dismissed.