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2017 (2) TMI 561 - AT - Income TaxAddition of bogus purchases - addition u/s 69C - Held that:- We find that the assessee had purchased goods from three parties that the sales tax authorities had made a reference to the Investigating Wing of the department, the AO had invoked the provisions of section 69C of the Act and had made an addition of ₹ 39.17 lakhs to the total income of the assessee. We find that the assessee had made a request to the AO to afford an opportunity to cross examine the persons whose statements had been relied upon to make the addition. Not giving a chance of cross examining the witnesses was violation of principles of natural justice. Addition made by the AO could be deleted only on that account. However even on merits, additions made is not sustainable. He had invoked the provisions of section 69C and the said section deals with unexplained expenditure. In our opinion, the FAA had rightly held that section 69C could not be used for making additions for unaccounted purchases as alleged by the AO - Decided in favour of assessee
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