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2016 (8) TMI 1594 - AT - Income TaxAddition u/s 69C - peak cash credit in respect of alleged bogus purchases - HELD THAT:- AO issued notice u/s 133(6) of the Act to the said suppliers which were not replied and when the assessee was confronted with the said fact, it was submitted that they had shifted their business locations. AO received information from the Sales Tax Department qua the above suppliers being suspicious dealers. We find merit in the arguments of the ld. AR that sources of purchases of material were not in dispute. The assessee has made purchases from these suppliers and duly made payments to the said suppliers and therefore the payments were duly reflected in the books of accounts of the assessee and therefore the provisions of section 69C of the Act cannot be invoked A plain perusal of the provisions of section 69C reveals that where the assessee has incurred any expenditure and the sources whereof could not be explained before the AO or AO is not satisfied with the explanation of the assessee only then provisions of section 69C could be invoked and not otherwise. In our view the order of CIT(A) upholding the application of provision of section 69C of the Act was wrong as the source of payment was not doubted or disputed. Decided in favour of assessee.
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