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2016 (1) TMI 645 - ITAT DELHI

2016 (1) TMI 645 - ITAT DELHI - TMI - Disallowance on account of bogus purchases - CIT(A) deleted the addition - Held that:- Assessee has given the details of the address, which are available with it at the time of purchases and sales tax assessment records of that assessee which proves that assessee has not provided incorrect address. Further Purchase bills shows all the requisite details of the suppliers in the bills, in our view it is a contemporaneous confirmation in itself by suppliers. Ld. .....

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tions/ 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. 86/Del/2010 - Dated:- 8-12-2015 .....

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in deleting the disallowance of expenses of ₹ 25,70,462/- made by the assessing officer on expenses relating to tools and consumables machinery repair and packing expenses‟. 2. That the ld CIT(A) erred in law and on the facts and circumstances of the case in holding that the assessee has proved the identity of the creditor and genuineness of the purchases made from M/s. R. K. Enterprises and M/s. Vasu Trading Corporation. 2. The facts in brief of the case are that the assessee compan .....

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t 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 .....

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he premises of M/s. R.K. Enterprise and M/s. Shri Vasu Trading Corporation to the premises of the assessee company. In order to prove the genuineness of existence of these firms, the assessee company furnished copy of Form 15 of IP Trade Tax. Further, the assessee company contended that mere absence of confirmation from these parties should not lead to conclusion that purchases from these parties were not genuine. In view of the above, the Assessing Officer noted that purchase made from M/s. R.K .....

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see procured mere bills from some person engaged in providing bills in name of such fictitious entities; therefore all the cheques were issued in November 2005. Bills 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 .....

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mation submitted by assessee a. Copies of ledger account of both the parties b. Copies of bills provided by both the parties c. Date wise list of material received / procured d. Bank statement of assessee where the payments made to these parties by account payee cheques e. Affidavit of transporter who transported goods to the factory of assessee f. Sales tax registration number and assessment details of the parties from whom purchases were made and sales tax assessment order in case of one party .....

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6. Ld AR of the appellant submitted the same arguments which were advanced before CIT (A) and he submitted that the assessee has discharged its onus fully and AO has made disallowance without any basis. Therefore CIT (A) has deleted the disallowance correctly. 7. We have heard the parties and perused the orders of lower authorities. It seems that mainly the disallowance is made because of the petition filed tax Evasion Petition by one of the director of the company Shri Sameer Khandelwal who al .....

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y AO, it remains a mere allegation and based on mere allegation no addition/ disallowance can be made. Contrarily, assessee has submitted overwhelming evidence in the form of Copies of ledger account of both the parties, copies of bills provided by both the parties, date wise list of material received / procured, bank statement of assessee where the payments made to these parties by account payee cheques, affidavit of transporter who transported goods to the factory of assessee, sales tax regist .....

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