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2021 (4) TMI 1338 - AT - Income TaxBogus purchases - As per AO bills issued by three parties are computer-generated identical bills and in his opinion same were not genuine - assessee reiterated the same submission that those parties were registered with VAT and therefore, the assessee was not required to produce those parties before the AO and it is for the AO to find out their addresses either from the bank or from the Registrar of companies - HELD THAT:- The fact of returned back of the notice u/s 133(6) and parties not found during verification by the Inspector were duly informed to the assessee, however, no attempt was made by the assessee to provide their current addresses to the Assessing Officer and the assessee only reiterated that those parties were duly registered with VAT and the AO might obtain their address from banks or Registrar of Companies. Despite specifically being asked to produce those parties for verification of their purchases, no attempt was made by the assessee to produce those parties. CIT(A) has also observed that no quantitative details of purchases and sales were provided by the assessee. In such circumstances, we are of the opinion that the purchases claimed by the assessee are not free from doubt. The assessee has to demonstrate sales corresponding to the purchases. In the case relied upon by the assessee, the sales were made to government department and thus sales were not doubted, but the instant case it has not been brought on record, whether the sales are made to the government Department or export sales. If the sales corresponding to the purchases are not demonstrated, then possibility of the entire purchases being doubtful cannot be denied. If the corresponding sales are demonstrated, then even if delivery of goods from purchase parties is not established, then possibility of purchase of goods in cash from another parties, cannot be denied. We are of the opinion that without reconciliation of purchases and corresponding sales with the help of the stock register, sustaining the disallowance of entire purchases is not justified. Therefore, we restore this issue back to the file of the Assessing Officer for deciding afresh with the direction to the assessee to file stock reconsideration statement along with relevant invoices of sales, documents in support of delivery of the goods from purchase parties. The assessee shall also produce relevant purchase parties along with their confirmation - AO may carry out inquiries as deemed fit - Appeal of assessee is allowed for statistical purposes.
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