Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 606 - ITAT DELHIBogus purchases - AO has relied on the information collected by the Investigation Wing and no opportunity to cross examine the parties has been afforded - CIT(A) deleted the additions - HELD THAT:- AO has relied on the information collected by the Investigation Wing and no opportunity to cross examine the parties has been afforded which is a violation of principles of natural justice. The assessee has provided copies of purchase bills, weightage bills and architect certificates. The AO has not reasoned that the bills or the certificate of the architects are bogus and wrong on facts. As per accounting standards AS-7, the purchases and working progress have to be reconciled along with architect report. The AO has not rejected the books of accounts and accepted the book profits while making the addition. Assessing Officer’s observation that none of the architects can find out the actual material, steel bars used construction of any building of 2 to 3 years cannot be accepted as the consumption of the material can be well estimated from the drawings and the site books. In the case of M/s Suman Enterprises, the statement of Amit Vashisht indicates that the firm has been registered and run by Shri Deepak, no further enquiries have been conducted. Inspector report cannot be given credence as the party was found to be genuine on enquiry. The better way for the AO could be to enquire about the amounts received from the assessee and from such amounts, if any, purchases of material have been made which in turn supplied to the assessee. The non- purchase of material/ non- utilization of the amounts for purchase of material by the suppliers would be an appropriate evidence to disallow this purchases but the same has been wanting. Reliance is placed on the order of Hon’ble High Court of Bombay in the case of CIT Vs Nikunj Eximp Pvt. Ltd. [2013 (1) TMI 88 - BOMBAY HIGH COURT] wherein it was held that no addition is warranted based on the fact that the suppliers have not appeared before the AO - we decline to interfere with the order of the ld. CIT (A) in deleting the addition. - Decided in favour of assessee.
|