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2014 (6) TMI 967 - AT - Income TaxBogus purchases - entire addition made on the statement of one Shri Rakeshkumar M. Gupta and his family members - allegation of the Revenue that the said family members were issuing accommodation bills to the assessee - Held that:- We find that the sales made by the assessee have been accepted. It is an elementary rule of accountancy as well as taxation laws that profit from business cannot be ascertained without deducting cost of purchase from sales, otherwise it could amount to levy of income-tax on gross receipts or on sales. We further find that the AO has not commented upon the retraction made by Shri Rakeshkumar M. Gupta and his family members. We noticed that the said retraction was made by filing an affidavit. Nothing has been brought on record except for the statement of Shri Rakeshkumar M. Gupta which could suggest that the purchases made by the assessee are bogus. Considering the entire facts in totality and keeping in mind that no adverse inference has been drawn so far as sales are concerned, we do not find any reason for making any disallowance on this account. The adhoc addition sustained by the Ld. CIT(A) is also without any basis and the same is deleted. - Decided in favour of assessee.
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