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2017 (9) TMI 1097 - AT - Income TaxDisallowance on account of 'Bogus Purchase u/s. 69C' for 'Unexplained Expenditure' - expenditure incurred on purchase of raw material used for trading and/ or manufacture of goods - Held that:- We find that the assessee has placed on record the documents pertaining to purchase of material from the parties. We have noticed that the AO has not issued notice u/s 133(6) of the I.T. Act to the bank of the assessee or of the suppliers to verify whether immediate cash had been withdrawn against the payments made by the assessee. We have further noticed that the AO has not rejected the assessee’s books of accounts u/s 145(3) of the Act and moreover no opportunity to confront or cross-examine the parties which were declared as hawala dealers by the Sales Tax Authorities was provided to the assessee. Merely because the assessee could not produce the stock records in the required form in 3CD do not prove that the purchases were not genuine. Under the above circumstances, we are of the considered view that non-producing of the supplier or stock register by the assessee is not the ground to declare the expenses /purchases as ‘unexplained expenditure’. Considering that the assessee had already supplied corroborative documents like copy of invoices, name and address of suppliers and details of bank transactions, we are of the considered view that the entire additions of ₹ 44,44,022 is unreasonable. Therefore in such circumstances, the ends of justice would be met in case the additions are restricted @ 12.5% of the total purchases. We direct the AO to restrict the additions to the extent of 12.5% of the total purchases
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