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2015 (9) TMI 745 - AT - Income TaxAddition on on account of alleged inflated expenses - Held that:- It is settled position of law that the assessee is required to prove veracity of the claim which it has made before the Revenue Authorities. In the case in hand, the assessee made purchases from three parties amounting to ₹ 12,69,880/-. It was found that such parties did not exist on the given addresses. Therefore, the genuineness of the claim could not be verified. The assessee was duly confronted with this finding and did not give any plausible explanation with regard to the same except that the GP declared by the assessee is quite reasonable and the assessee did not suppress any profit margins. In our considered view, it is incumbent upon the assessee to prove the genuineness of its claim in respect of the purchases made, but the assessee in the given case has grossly failed to do so. The AO pointed out that on the bills furnished by the assessee, there was no mention of VAP/ST Numbers. All the bills were computer-generated did not have detailed addresses of the parties and no contact numbers are mentioned in any of the Bill. - Decided against assessee. Confirmation of disallowance u/s.40A(3) - contention of the assessee is that the payment is made to the Electricity Company of the Government of Gujarat - Held that:- the payment was made in cash is not in dispute. The payment is made to a Company engaged in the business of distribution of power-supply. It is not the case where the assessee has booked bogus expenditure to a non-existent entity. Therefore, keeping in view the object of the provisions of section 40A(3) of the Act and intention of the legislation, we hereby direct the AO to delete the addition. - Decided in favour of assessee.
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