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2016 (1) TMI 645 - AT - Income TaxDisallowance on account of bogus purchases - CIT(A) deleted the addition - Held that:- Assessee has given the details of the address, which are available with it at the time of purchases and sales tax assessment records of that assessee which proves that assessee has not provided incorrect address. Further Purchase bills shows all the requisite details of the suppliers in the bills, in our view it is a contemporaneous confirmation in itself by suppliers. Ld. AO is of the view that as both the suppliers have PAN however both of them are not assessed to Income tax. On this aspect no fault can be found with the assessee. Further disproportionate increase in packing material machinery expenditure compared to sales is the first point, which should provoke AO to make further investigation , which has not been done. In absence of further investigation such as with sales tax authorities, bankers who have received the cheque on behalf of suppliers etc. additions/ disallowance made on basis of disproportionate increase become a mere statistical exercise , which cannot be sustained. Merely because notices u/s 133(6) could not be served on the suppliers, assessee- buyer cannot be put to an inconvenience of disallowance when he has provided the correct address of those parties. In view of this we confirm the order of CIT (A) in deleting the disallowance on account of bogus purchases - Decided against revenue.
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