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2016 (11) TMI 793

Head Note:
Bogus purchases - proof of genuinity of expenditure - Held that:- The books of account of the assessee, which were duly audited as per provisions of the Act, were found to be not questioned by the Assessing Officer. Although the Assessing Officer ordered deletion of the purchases made from the afore-referred to five creditors, he was found to have taken a self-contradictory stand of accepting the total declared sales of the assessee of over ₹ 2.17 crores, as also the expenses debited to the profit and loss account, which were based on the purchases ordered to be disallowed by him.

Tribunal noted that the assessee had fully co-operated in the proceedings before the Assessing Officer by giving details of the disputed creditors, but such information was not acted upon by the Assessing Officer in accordance with the prescribed procedure and was wrongly brushed aside by him only on the ground that the same had been provided at a late stage of the proceedings. The Assessing Officer was found to have the necessary particulars regarding the above referred to five creditors, but for the reasons best known to him, he did not summon any of them. More importantly, the Tribunal noted that for all the purchases ordered to be disallowed by the Assessing Officer, payments had been made by the assessee through account payee cheques, which remained unquestioned by the Assessing Officer. The creditors, having been paid through account payee cheques could thus have easily been traced. - Decided in favour of assessee


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