IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 308 of 2014 (O & M) Date of Decision:- 30.04.2015 Commissioner of Income Tax-III, Ludhiana ......Appellant(s) vs. M/s. R.B. Knit Exports ......Respondent(s) CORAM:- HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE G.S.SANDHAWALIA Present:- Mr. Rajesh Katoch, Advocate, for petitioner. Ms. Rinku Dhaiya, Advocate, for respondent. S.J. VAZIFDAR, A.C.J. (Oral) This is appeal against order of Tribunal dismissing appellant's appeal against order of CIT (Appeals) to substantial extent. Assessing Officer (in short 'AO') had made disallowance to extent of `2,17,25,124/- out of fabrication charges claimed by respondent-assessee on ground that genuineness of expenditure was not proved. assessee had made payments under `20,000/- to various fabricators/job workers aggregating to about `4.34 crores. AO directed Inspector to investigate genuineness and identity of fabricators. Inspector submitted his report which inter alia stated that many of fabricators were not found at residential address furnished by respondent. In some cases, house number was not existing. AO 1 of 2 ::: Downloaded on - 01-01-2019 10:23:54 ::: -2- disallowed expenses to extent of `2.17 crores. CIT (Appeals) dealt with matter including Inspector's report in considerable detail. Tribunal, by impugned order, has accepted findings of CIT. As rightly submitted by Ms. Rinku Dhaiya, matter is essentially question of fact and does not raise substantial question of law. We are unable to state that findings of CIT and Tribunal are perverse or absurd. It is sufficient to refer to only few aspects regarding 37 persons in respect of whom Inspector had made enquiries. name of one person has been repeated. 17 of these 37 people had subsequently been traced. It was found that two of them had expired. In certain cases, Inspector had gone to wrong address. As noted by Tribunal, Inspector carried out entire exercise in one working day itself. Tribunal has, therefore, found it difficult to place reliance on report. It is difficult to imagine inspection in respect of 37 fabricators having been carried out satisfactorily within one day. In any event, this is matter of balance of probabilities involving questions of fact. In circumstances, Ms. Rinku Dhaiya's submission on behalf of respondent that matter involves essentially questions of fact and does not raise substantial question of law is well founded. Accordingly, CIT (Appeals) and the Tribunal having sustained disallowance to extent of only `15 lacs cannot be said to be absurd or perverse. appeal is, therefore, dismissed. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) JUDGE 30.04.2015 shivani 2 of 2 ::: Downloaded on - 01-01-2019 10:23:54 ::: Commissioner of Income-tax-III, Ludhiana v. R.B. Knit Export