2013 (1) TMI 88 - BOMBAY HIGH COURT - Income Tax

Head Note / Extract:
Bogus purchases - suppliers were nonexistent and one of the parties had denied having any business dealings with the Assessee Company - ITAT deleted the addition made by AO - Held that:- From the order of the Tribunal it can be concluded that it has deleted the additions on account of bogus purchases not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. Books of Accounts of the assessee have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department i.e. Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were infact made. Merely because the suppliers have not appeared before the AO or the CIT(A), one cannot conclude that the purchases were not made by the assessee. Disallowance merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them is not warranted- thus the order of the Tribunal is well a reasoned order taking into account all the facts before concluding that the purchases of ₹ 1.33 crores was not bogus - in favour of assessee.