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2017 (11) TMI 628 - ITAT MUMBAIAdditions to the tune of 2% of bogus purchase - bogus transactions being accommodation entries - Held that:- We have observed that the assessee has made bogus purchases from Sthapna Trade Impex P. Ltd. and Ritesh Corporation to the tune of ₹ 96,84,465/- which has been confirmed by the said suppliers to be bogus transactions being accommodation entries wherein only paper invoices were issued without supplying goods physically. The assessee could not produce said parties before the A.O. nor the assessee could prove utilization / consumption of the said material . Thus, quantitative reconciliation of the stock/material was not done by the assessee before the authorities below. Nor any paper book is filed before the tribunal to support the contentions of the assessee. The assessee also could not produce evidence as to the delivery of material to the assessee such as lorry receipts, delivery challans, octroi receipts etc. to prove delivery of material by the supplier to the assessee. A.O has made random verification with respect to the sales and has come to the conclusion that sales are genuine and business losses were disallowed by the AO. We have observed that there is categorically finding by the AO that assessee has not proved utilization/consumption of the material purchased by the assessee and corresponding quantitative reconciliation with the said sales entries were not produced by the assessee before the AO . The learned CIT(A) has restricted disallowance to 2% of bogus purchases without brining on record as to how deficiencies as pointed out by the AO were met. Thus the appellate order of learned CIT(A) cannot be sustained and is hereby order to be set aside and in our considered view this matter need to be set aside and resorted to the file of the A.O for denovo determination of the issue - Decided in favour of revenue for statistical purposes.
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