TMI Blog2014 (6) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta and his family members. We noticed that the said retraction was made by filing an affidavit. Nothing has been brought on record except for the statement of Shri Rakeshkumar M. Gupta which could suggest that the purchases made by the assessee are bogus. Considering the entire facts in totality and keeping in mind that no adverse inference has been drawn so far as sales are concerned, we do not find any reason for making any disallowance on this account. The adhoc addition sustained by the Ld. CIT(A) is also without any basis and the same is deleted. - Decided in favour of assessee. - I.T.A. No. 3740 & 3741/Mum/2012 - - - Dated:- 10-6-2014 - SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also one of the persons who had made purchases from the aforementioned parties. The assessee was asked to justify his purchases from the aforementioned parties. 2.1. The assessee submitted bills with delivery challan, the evidence of making payment through account payee cheque. The assessee also filed monthly quantitative stock reconciliation. The assessee was further asked to explain why the bogus purchases made from the aforementioned parties be not added to the income. It was explained by the assessee that the statements given by Shri Rakeshkumar M. Gupta and his family members are not correct. It was further explained that purchases and sales are duly reflected in the books of account of the assessee. It was also brought to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition has been made on the statement of one Shri Rakeshkumar M. Gupta and his family members. It is the allegation of the Revenue that the said family members were issuing accommodation bills to the assessee. The AO accordingly went on to treat the entire purchases as bogus purchases. However, we find that the sales made by the assessee have been accepted. It is an elementary rule of accountancy as well as taxation laws that profit from business cannot be ascertained without deducting cost of purchase from sales, otherwise it could amount to levy of income-tax on gross receipts or on sales. We further find that the AO has not commented upon the retraction made by Shri Rakeshkumar M. Gupta and his family members. We noticed that the said ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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