Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (7) TMI 647 - AT - Income TaxBogus purchases of goods - Additions u/s 68 and 69C - deemed income on account of unexplained expenditure on purchases - non-genuineness of exports - HELD THAT:- In the present case, the assessee had furnished purchase bills issued by abovenamed four parties, their CST/RST numbers, PANs, proof regarding payment made by account payee cheques, etc. which was expected from a prudent purchaser. We are thus of the view that the assessee had discharged its primary onus. Besides two parties of the purchase i.e. M/s Adinath Traders and M/s Om Shree Jewellers had appeared before the AO and confirmed the sales made to the assessee. The assessee had also accounted for all purchases in the books. The goods purchased from these four parties were exported and customs authorities have certified the exports made by the assessee. In support of the exports, necessary documents were furnished which included invoice of sending the goods to Image Link Co. Ltd., Japan and M/s A.R. Gems Co. Ltd., Bangkok. The goods were exported by Thai Airways International Public Co. Ltd. and payments were made to custom house agent Shri P.K. Jain. The cargo was handled through Rajasthan Small Industries Corporation Ltd. and foreign currency was received through bank. The assessee had also credited the export realization received through banking channel in its books of account. Thus, we are of the view that the balance of bona fide of purchases made from the abovenamed four parties is in favour of the assessee especially in absence of any positive evidence which the AO ought to have brought on record that goods were purchased from some other named parties if not from the abovenamed four parties and that amount paid to them through account payee cheques by the assessee was ultimately returned by them to the assessee. In absence of such positive evidence, the AO in our view was not justified in treating the purchases claimed to have been made from the abovenamed four parties as non-genuine and bogus. The learned CIT(A) has also erred in sustaining the addition made in this regard u/s 69C of the Act and again under proviso to s. 69C of the Act without appreciating the aforesaid facts and circumstances properly. Thus, there was no occasion before the AO to invoke provisions of s. 145(3) of the Act and making additions in question i.e. u/s 69C of the Act and under proviso to s. 69C of the Act. Both the additions are directed to be deleted. Ground Nos. 1 and 2 are thus allowed in favour of the assessee. In the result, appeal is allowed.
|