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2018 (3) TMI 1525 - AT - Income TaxAddition of bogus purchases - jewellery business - allegation that jewellery was purchased from unexplained cash - Held that:- The primary allegation of the ld AO that the assessee had received the cash back in lieu of account payee cheques issued from M/s Vitrag Jewels ( based on the statement of Shri Rajendra Jain) and used the said cash for purchasing diamonds from unknown parties in the grey market, gets defeated on this count also, in as much as, the ld AO had accepted the fact that factum of purchases of diamonds indeed has been made by the assessee in the Asst Year 2007-08 (i.e the year under appeal) and whereas the payments were made to Vitrag Jewels only in next Asst Year i.e AY 2008-09. It is highly impossible for M/s Vitrag Jewels to first hand over the cash even without receiving the cheques from the assessee. Hence no cash could be available with the assessee to make purchase of diamonds from unknown parties in the grey market in Asst Year 2007-08. Hence the allegation of the ld AO only leads to impossible situation. - Decided in favour of assessee
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