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2022 (9) TMI 177 - AT - Income TaxBogus Purchases - CIT-A deleted the addition - HELD THAT:- CIT(A) has rightly observed that the disallowance of expenditure claimed by the assessee does not have any implications on its income which has been accounted for as work-in-progress. By observing so, he deleted the addition made by the AO. At the same time, we further observe that the AO in para 5 of the assessment order had observed that the assessee has claimed expenditure on account of purchase from certain parties who are involved in merely issue of purchase bills and effecting payments through banking channels for commission and not actually supported with the physical transfer of goods. From first appellate order, we observe that the CIT(A) concluded the issue in favour of the assessee by observing and directing the AO to make available all adverse material and to allow opportunity to the assessee to explain/rebut the evidence and this may be undertaken during AY 2012-13 and subsequent years when the said expenditures embedded in the work-in-progress will be considered for computing the income of the assessee as per POC method and also directed the AO to take action as per law. CIT(A) passed impugned order on 11.07.2014, much water have flown till today including conclusion of assessment proceedings for the several assessment years to AY 2011-12, including AY 2012-13 and outcome of these orders has to be taken care by the authorities below in view of controversy arose during AY 2011-12. Therefore, we find it appropriate and necessary to restore the issue to the file of the CIT(A) to consider the adjudication of the issue in AY 2012-13 and relevant subsequent assessment years - Appeal allowed for statistical purposes.
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