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2016 (4) TMI 956 - AT - Income TaxDetermination of income - bogus purchases - Held that:- AO had disallowed an amount under the head unproved purchases, that in the rectification proceedings carried out on two occasions he reduced it to ₹ 7.54 Crores, that he had issued notices u/s.133(6)of the Act on test check basis, that during the appellate proceedings the FAA had forwarded certain documents to the AO and had called for his comments, that the successor AO alleged many an irregularities in the accounts maintained by the assessee, that the FAA has given categorical finding of fact about filing of confirmation letters of suppliers of fish along with details of their bank statement, copies of acknowledgment of income tax returns and reconciliation statement. He specifically mentioned that vide letters dated 27.2.13 and 23.9.2013 the AO had furnished all the necessary details. Before us, the DR on the basis of the assessment records, admitted that both the letters and the annextures to the letters were available on the file of the AO. In thses circumstances, we are of the opinion that the findings of facts recorded by the FAA with regard to the purchases in question present the true picture and the comments of the AO made in his letter 13.11.2013 were factually incorrect. It is also a fact that the AO had not rejected the books of accounts maintained by the assessee, nor has doubted the genuineness of the sales made by it. In the matter of Nikunj Exim Enterprises Pvt. Ltd. (2013 (1) TMI 88 - BOMBAY HIGH COURT), the Hon’ble Bombay High Court has specifically held that in a case where sales are considered genuine, no addition, on account of bogus purchases, can be made. Considering the facts that all the details were furnished before the AO and that same were not considered by him and respectfully following the judgment of Nikunj Exim Enterprises Pvt. Ltd. (supra), we decide the effective Ground of appeal against the AO. - Decided in favour of assessee.
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