2006 (8) TMI 272 - ITAT JODHPUR

Income From Undisclosed Sources - purchases are non-genuine or bogus - Addition made by the AO by holding that the assessee did not pay any sales-tax to the Department or Mandi tax on 'Arhat' - HELD THAT:- In our considered opinion, the assessee has discharged the primary onus cast on him by s. 69 of the Act by showing the purchases, their entries in the books of accounts, payments by way of account payee cheque, producing the vouchers of sales of the goods. The AO has miserably failed to bring on record any clinching evidence to prove that these alleged purchases were verily bogus and not genuine. The AO has not arrived at a judicious conclusion after applying his own mind. Strangely enough, the AO has half-heartedly accepted certain quantum of purchases because out of total purchases aggregating Rs. 9,93,442, he has disallowed only a peak of Rs. 3,36,852. This finding of the AO is paradoxical. The AO did not make requisite investigation against the two sellers.

Thus, we confirm the impugned deletion and dismiss ground No. (i) of the appeal.

Addition made by the AO by holding that the assessee did not pay any sales-tax to the Department or Mandi tax on 'Arhat' - AO added this amount by multiplying 5.6 per cent with total purchase value of Rs. 9,93,442. Thus, where we have held that the purchases are genuine, no such addition can be made. Consequently, we dismiss this ground of appeal also.

In the result, the appeal of the Revenue stands dismissed.