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2017 (12) TMI 803 - AT - Income TaxBogus purchases - addition on inflated purchases - Held that:- AO has assessed five assessment years and found discrepancies only in two AYs relevant to AY 2008-09 and 2013-14 and none of the regular suppliers have denied that they have sold material to assessee nor have they accepted to have issued any accommodation entries. By considering the above discussion, in our considered view, there is no cogent material in support of the findings of AO that assessee has in fact recorded any bogus purchases and it is clear from the submission of the assessee that these are actual wastages incurred by the assessee in its business and also assessee has declared ‘scrap sale’ for the value of wastage to the extent of ₹ 90,63,070/-, which is much higher than the alleged value of inflated invoices. Hence, we are in agreement with the findings of the CIT(A) in deleting the addition made by the AO on this count and accordingly, we uphold the order of CIT(A) and dismiss the grounds raised by the revenue.
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