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2017 (8) TMI 641 - AT - Income TaxBogus purchases - AO observed that, transaction of purchase of material four parties are nothing but a colorable devices using forged and fabricated bills for the purposes of evasion of income-tax. - Notice u/s 133(6) returned as unserved - Held that:- In the absence of utilization/consumption of the material so purchased from these alleged entry providers being proved for manufacturing of finished goods, there is always possibility of manipulations to suppress profits and evade taxes and hence it is critical for the assessee to prove utilization/consumption of these material so purchased for manufacturing of finished goods dealt with by the assessee. In our considered view keeping in view factual matrix of the case and in the interest of justice to both the parties, the matter needs to be set aside and restored to file of A.O. for denovo determination of this issue by the AO on merits in accordance with law and the assessee is hereby directed to prove the consumption/utilization of the material so purchased from these alleged entry providers for manufacture of the engineering goods so dealt with by the assessee with cogent evidences before the A.O. including production of excise records concerning stocks and also to prove that these purchases to the tune of ₹ 82,54,793/- from these alleged entry operators were genuine. The AO shall admit all relevant evidences /material filed by the assessee in de-novo proceedings before adjudicating this issue on merits in accordance with law.
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