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2023 (1) TMI 818 - AT - Income TaxBogus purchases - A.O stated that as per the information received from Sale Tax Department the assessee has made purchases from the following bogus dealers listed by the Sale Tax Department - assessee submitted that payment for the purchase material and payment has been made through cheques/RTGS and he submitted a copy of certificate issue by Greater Bank and all the payments were made by account payee cheques only - HELD THAT:- The assessee has submitted the copies of ledger account of the 5 parties, copy of bank statement showing payment made by account payee cheques certificate from civil engineer and site engineer etc. and submitted that without disproving these material the A.O has made the addition on the basis of information displayed on the website of the sale tax department. After taking into consideration the above facts and material on record, it is observed that assessee has not claimed such expenses as revenue expenses during the year under consideration but same were capitalized as work in progress. Therefore, any disallowance it is made its amount to reduce work in progress, since, the expenses were capitalized in the work in progress. Since the expenses were shown by the assessee under the head work in progress and has not been reflected in the trading account, therefore, no addition can be made.We consider that decision of ld. CIT(A) in sustaining the impugned disallowance of expenditure made by the A.O is not justified. Accordingly, the ground of the appeal of the assessee is allowed.
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