TMI Blog2016 (1) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery expenditure compared to sales is the first point, which should provoke AO to make further investigation , which has not been done. In absence of further investigation such as with sales tax authorities, bankers who have received the cheque on behalf of suppliers etc. additions/ disallowance made on basis of disproportionate increase become a mere statistical exercise , which cannot be sustained. Merely because notices u/s 133(6) could not be served on the suppliers, assessee- buyer cannot be put to an inconvenience of disallowance when he has provided the correct address of those parties. In view of this we confirm the order of CIT (A) in deleting the disallowance on account of bogus purchases - Decided against revenue. - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny assessment and processed u/s 143(1) of the Income Tax Act, 1961 (in short the Act ). Notices u/s 143(2) was issued. 3. In the assessment order, the Assessing Officer noted that the assessee firm submitted that there was a steep rise in the expenses related to toll and consumables, machinery and packing expenses. Further, he noticed that the assessee company had not maintained any quantitative details or stock registers. The Assessing Officer were issued notices to both the firms u/s 133(6) to verify the purchases, and found that M/s. R. K. Enterprises was closed and another M/s. Vasu Trading Corporation could not be traceable. The assessee company could not furnish any evidence to verify the existence of these firms. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were taken for the items for which no verification is possible with the help of Excise record or by comparing yield etc. Therefore the Assessing Officer disallowed the total expenses of ₹ 25,70,462/- and added to the income of the assessee. Since, books of accounts of assessee are not reliable it is not verifiable as to what part of such consumables debited remained unconsumed at the year-end. Further assessee must have incurred some expenditure outside the books of accounts to arrange for fictitious bills. Therefore, an addition of ₹ 5,00,000/- is made to the total income of the assessee. Thus, total ₹ 30,70,462/- added to the income of the assessee. 4. Aggrieved the assessee filed an appeal before the learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is made because of the petition filed tax Evasion Petition by one of the director of the company Shri Sameer Khandelwal who alleged that assessee is evading the taxes by debiting bogus expenses in the nature of repair expenses. However, in the order of AO we could not gather what evidence he has laid before AO to prove that assessee is evading taxes by booking bogus expenses. In the office note attached with the assessment order, which is filed before us, did not show any evidence available with AO or supplied by the petitioner. In absence of any positive evidence led by the Petitioner and ITS independent examination by AO, it remains a mere allegation and based on mere allegation no addition/ disallowance can be made. Contrarily, assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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