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2018 (3) TMI 1685 - ITAT MUMBAIBogus purchases u/s 69C - Held that:- The sales turnover achieved by the assessee has not been disputed by the revenue and the purchases were backed by invoices. At the same time, the assessee could not produce any confirmation from any of the suppliers despite being provided with adequate opportunity and notices issued u/s 133(6) elicited no response, which cast serious doubts on assessee’s claim. It is also evident from perusal of Tax Audit Report that the assessee was not maintaining adequate stock records. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of Value Added Tax [VAT] against such bogus purchases. Since the assessee was engaged in trading activities, the goods must have been sourced by the assessee from somewhere else, the source of investment of which remained unexplained. - Decided partly in favour of assessee Addition on account of unexplained cash credit u/s 68 - Held that:- Upon perusal of impugned order, it is noted that the assessee was not able to satisfy the three ingredients viz. identity, creditworthiness & genuineness against the same. Needless to say that the complete onus to prove the same rest on the assessee. Therefore, in the interest of justice, we remit the matter back to the file of Ld. AO with a direction to assessee to substantiate the same and demonstrate fulfillment of requirements of Section 68. Addition u/s 41(1) - Held that:- Upon perusal of ledger extract, it is noted that there is no transaction by assessee with the said entity during impugned AY and AR has contended that the said amount is still outstanding and is subject matter of certain litigation / settlement. In view of the stated fact, the matter stands remitted back to the file of Ld. AO with a direction to the assessee to substantiate the fact that there was no remission or cessation of liability during impugned AY within the meaning of Section 41(1). Resultantly, this ground stands partly allowed for statistical purposes.
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