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2020 (10) TMI 1087 - AT - Income TaxBogus purchases - Estimation of income - investigations carried out by the Investigation Wing, Mumbai as well as on the basis of statements recorded U/s 132(4) - HELD THAT:- There is nothing on record to show that the ITO had not disclosed to the assessee, the material he had collected from the Investigation Wing of the Income Tax Department. ITO/AO is not bound by any technical rules of law of evidence. It is open to him to collect materials to facilitate the assessment even by private enquiry but if he desires to use the said material so collected, then in that eventuality, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. In this case, the A.O. had informed the assessee in respect of material collected by him and had also provided adequate opportunity to the assessee of explaining the same. Even otherwise, from the records, we also noticed that in the statement of Shri Bhanwal Lal Jain recorded U/s 132(4) of the Act, it was specifically admitted that they were involved in providing bogus entries by issuing accommodation bills. AR could not point out any material on record to show that the above concerns from whom the purchases made, were in fact carrying out any commercial activity and were maintaining stocks. Presumption of correctness is attached with the statement recorded U/s 132(4) of the Act as the said statement was recorded by the officials of the IT department during discharge of their official duties and since the said statement is recorded on oath, therefore, the presumption of correctness is attached with the said statement until it is rebutted or uprooted by the assessee. We also noticed that the ld. CIT(A) while reaching to the conclusion on the basis of material placed on record had held that since the assessee has failed to justify the purchases made by him, therefore, had rightly invoked the provisions of Section 145(3) - since the assessee failed to substantiate the purchases of ₹ 90,42,850/-, therefore, keeping in mind, the better trading results declared by the assessee, a lumpsum addition of ₹ 10.00 lacs were sustained. - Decided against assessee.
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