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2019 (8) TMI 1769 - AT - Income Tax
Bogus purchases - AO rejected the books of account u/s 145(3) - AO relied upon the material collected during the course of search in the case of Shri Bhanwarlal Jain Group of cases for providing bogus entries to different persons/concerns including the assessee - HELD THAT:- Material found during the course of search in the entities of Shri Bhanwarlal Jain Group of cases cannot be used in evidence against the assessee. The reliance of the authorities below of such material is of no use and basis. The other material available on record are the documentary evidences filed by assessee which are copies of the purchase invoices, stock register reflecting purchase and sales, bank statements highlighting payments made by assessee to these parties through banking channel, copy of bank statements of both seller parties along with their balance-sheet confirmations and copy of acknowledgment of filing of the income tax returns.
A.O. did not make any inquiry on the documentary evidences filed by assessee and did not doubt the explanations. Since the documentary evidences filed on record have not been doubted by A.O. and no adverse finding have been given and no inquiry have been made into the claim of assessee, therefore, there was no basis to treat such purchases as bogus - Entire addition is wholly unjustified and even it is not a fit case where Gross Profit rate of 5% be applied for sustaining the part addition - Decided in favour of assessee.