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2017 (2) TMI 1192 - ITAT MUMBAIBogus purchases addition - Held that:- The information received from the sales tax authorities was a good starting point for making further investigation and to take it to logical end. But, he stopped at that juncture and did not collect further evidences. While making the disallowance of entire purchases, he did not doubt the sales made by the assessee. As per the established principles of tax jurisprudence no sales can be affected without purchases. Therefore, in our opinion there was no justification in disallowing the entire purchases. By producing the bank statement and stock statement, the assessee has discharged the burden cast upon her. We find that in all the cases, relied upon by the assessee, the Tribunal has held that where the AO accepts the sale made by the assessee, he cannot reject the entire purchases. It is true that the FAA has rejected the books, but, he has not given any reason for the rejection of the same. We would also like to mention that the FAA had without assigning any reason had disturbed the profit rates shown by the assessee. He should have called for an explanation of the assessee about fall in the GP for the year under consideration. There can be several reasons for variation in profit rates, so, only on that basis results of audited book should not be disturbed. - Decided in favour of the assessee.
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