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2016 (10) TMI 890 - ITAT MUMBAIBogus purchases - information obtained from the Sales Tax Department relied upon - Held that:- The assessee itself had filed conformations for purchases from two of the three parties, copies of purchase bills, copies of bank account statements to show payment for the same were through banking channels, copies of stock register to show that the material from these parties had been received, etc. to establish the genuineness of these purchases. It is a fact on record that the AO has not doubted the sales effected by the assessee and therefore, it is in order to conclude that without corresponding purchases being effected, the assessee would not have made sales. AO has not brought on record any material evidence to conclusively prove that the purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the statement of a third party before the Sales Tax Department, without affording the assessee adequate opportunity to cross examine that person or the fact that these parties did not respond to notice under section 133(6) of the Act would not suffice to treat the purchases as bogus and make the addition. If the AO doubted the genuineness of this said purchases, it was incumbent upon him to cause further inquiries in the matter to ascertain the genuineness or otherwise of the transactions. Without causing any further enquires in respect of the said purchases, the AO cannot make the addition under section 69C of the Act by merely relying on information obtained from the Sales Tax Department, the statement/affidavit of a third party, Shri Rajendra Dodhiwala wherein the assessee was not named or afforded opportunity of cross examination of that person and issue of notices under section 133(6) of the Act. - Decided in favour of assessee
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