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2017 (10) TMI 45 - AT - Income TaxBogus purchase - survey conducted u/s. 133A - assessee did not produce stock register - CIT-A deleted the disallowance - Held that:- The assessee filed relevant details in respect of all the three parties. The CIT-A examining the same found that Pradhan Tanners is registered in VAT and as such claimed refund from VAT Authorities. The payments were made through account payee cheques. We find that all the details i.e. stock register, claim of VAT payments, ledger copy and statements u/s. 133(6) of the Act were on record available before the AO/CIT-A. But, the AO proceeded to make addition on suspicion that the assessee did not produce stock register and the receipts showing purchases from the said three parties were bogus and incorrect. We find that the CIT-A examined all the details of said three parties and found satisfied that all the transactions are duly recorded in the books and disclosed the same in the return filed after the date of survey. We further find that all the transactions with the said parties were made through account payee cheques and the same were confirmed under 133(6) of the Act proceedings by the said parties. Therefore, we find no infirmity in the impugned order of the CIT-A and it is justified Addition on account of difference found in stock - difference of stock value as found as per books maintained by the assessee and stock found physically as on the date of survey - assessee explained such difference as the production entries were not recorded upto the date of survey and it was the practice to record the same at the time of sales - Held that:- AO made the addition on account of difference between the stock found on physical verification and recorded in the regular books of account as on the date of survey, which is not justified. The assessee is running a 100% export oriented unit and no incriminating material was found to show that the assessee had suppressed sales of goods. We further find that the AO has not brought on record any material to find fault in the explanation offered by the assessee for such difference by way of reconciliation statement furnished by the assessee. We find that the assessee has been following the same method of maintaining of stocks as followed in the earlier years. We find that before the AO the assessee has provided every detail of raw materials and production thereon and practices adopted in their business, which were not accepted by the AO on the ground that different in stock found as per books and as on the date of survey. We find that the submissions of the assessee made before the AO and CIT-A were same and found reasonable and acceptable to the facts of the case. Revenue appeal dismissed.
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