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2016 (12) TMI 51 - AT - Income TaxAddition of bogus purchases of machinery - disallowance of depreciation - Held that:- AO has proceeded to make the additions on the basis of suspicion that the purchases have been made from Hawala entry operators listed on the website of Sales Tax Department but strangely, no independent inquiry to corroborate the transaction has been made by the AO. The full information in the shape of invoice copy, confirmation etc. was available before AO yet no notice u/s 133(6) was issued to the supplier. The assessee also placed the photographs of Machinery in support of physical delivery and installation at the premises of the assessee, but the same were not verified by the lower authorities. On these facts, the assessee had duly discharged its initial onus to prove the purchases and onus was on revenue to confront the same. CIT(A) affirmed the same by noticing that the Sales Tax payment has been discharged by the assessee without seeking cross examination of the supplier before Sales Tax Department. But the proceedings before Sales Tax Department alone could not be the sole basis of addition in the hands of assessee before Income Tax Authorities. Further, as rightly observed by Ld. CIT(A), Section 69 had no applicability in the case of the assessee as the Machinery was duly recorded in the books of account. We are inclined to allow the appeal of the assessee and delete both the impugned addition - Decided in favour of assessee.
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