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2016 (4) TMI 1321 - ITAT DELHIAddition made u/s 35 being the amount spent for purchase of plant and machinery - Held that:- AO or the ld. DR has not controverted this fact that the R & D program of the assessee has been approved by the Government of India and other relevant appropriate authorities and efforts of the assessee on R & D were awarded by National Award in 2007 and other appreciations by ACMA. We cannot ignore this fact that the assessee’s books of account are properly audited and subject to public scrutiny by other statutory bodies such as Registrar of Companies and SEBI etc. which fact cannot be ignored or rejected at the threshold which conclusively supports the claim of the assessee towards purchase of plant and machinery for R & D purpose. On the basis of foregoing discussion, we are unable to see any ambiguity or perversity or any other valid reason to interfere with the impugned order of the ld. CIT(A) and thus we uphold the same. Accordingly, we approve the conclusion of the ld. CIT(A) who deleted the baseless addition and disallowance made by the AO and hence the sole ground of the Revenue being devoid of merits is dismissed. Disallowance of the software purchase made by the appellant for the purposes of its R&D - Held that:- One must not forget that the Revenue, which has powers regarding discovery, inspection, production and calling for evidence as well as survey, search and seizure and requisition of books of accounts and the inability of assessee to produce the supplier could not lead to an adverse inference against the assessee that the supplier was bogus or non-existent. In the present case, the AO has not made any further investigations or enquiry about the supplier and that too he accepted existence of M/s Exim for other purchases which was effected through the same period. The ld. CIT(A), despite confirmation of accounts placed before AO, incorrectly held that there is no confirmation. Per contra, the assessee has discharged the onus cast upon it to establish the genuineness and purchases and onus was shifted to the Revenue but not properly discharge by the AO for making the addition. Thus, conclusion of the AO as well as the ld. CIT(A) is not sustainable. Hence we demolish the same and Ground Nos. 1 to 3 of the assessee are allowed.
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