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2017 (8) TMI 643 - AT - Income TaxBogus purchases - Disallowance of purchases to the tune of 12.5%. - AO received information from the DGIT (Inv.), Mumbai that the Sales tax Department had carried out extensive investigation on various VAT dodgers (hawala operators) who were known to be issuing accommodation bills to various parties by issuing bogus bills without supplying actual material - Notices sent to parties u/s 133(6) retuned back by the postal authority with the remarks "not known", "no such address", "left" etc.. Held that:- The assessee has claimed that the material purchased from these parties was used/consumed for its printing and publishing business but consumption/utilization of the said material for printing/publishing business of the assessee was not proved. The onus is on the assessee to prove consumption/utilization of the said material for assessee printing/publishing business of the assessee with material evidences, which the assessee failed to prove. As the assessee has claimed that the said material so allegedly purchased from six hawala entry operators was consumed/utilized for its printing/publishing business, there is always possibility of deflating/suppressing profits by obtaining bogus bills unless utilization/consumption is proved. Under these circumstances keeping in view factual matrix of the case, both the parties fairly agreed that the matter needs to be set aside and restored to the file of the A.O. for de novo determination of the issue on merits in accordance with law - Matter remanded back.
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