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2018 (1) TMI 580 - AT - Income TaxBogus purchase - failure to discharge the onus of proving the purchase of material as genuine - Held that:- The assessee has been continuously declaring the net profit in the range of 1.71 per cent. to 4.65 per cent. and the disallowance made by the Assessing Officer if accepted would increase the net profit to the tune of 25.15 per cent. which is very abnormal. The contention of the authorised representative that the suppliers of these goods have no permanent place for carrying on the business can be accepted. There were no defects in the books of account of the assessee has been pointed out by the Assessing Officer. It cannot also be said that after purchasing bitumen to the tune of ₹ 2.30 crores in the work can be executed by using the building material to the tune of ₹ 1.07 crores only as equivalent building material is also required to utilise the bitumen. Moreover the assessee has done major part of the work for the Government departments and the authenticity of the work done has been confirmed by the Government departments. In the case of CIT v. Leader Valves P. Ltd. [2006 (2) TMI 126 - PUNJAB AND HARYANA High Court] wherein held that if the purchase were treated as bogus it would be impossible to manufacture the goods shown to have been manufactured by it. This is applicable in the case of the assessee also as the disallowance will lead to net profit of 25 per cent. and also the fact that the work executed by the assessee has been certified by the Government agencies. The quantitative details of Bitument has been clearly mentioned along with correspondent utilization of mitti, sand and crusher stone. In the case of ITO v. Liyakat Ali Mohd. Sadik [2003 (9) TMI 326 - ITAT JODHPUR] wherein it was held that when purchases are made from unregistered dealers and are supported by bills and vouchers no addition can be warranted in the absence of rejection of books of account. Thus the action of the learned Commissioner of Income-tax (Appeals) deleting the addition is hereby confirmed. - Decided in favour of assessee.
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