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TMI Blog2017 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... on made u/s. 69C of the Act in respect of bogus purchases of Rs. 3. 15 crores. During the assessment proceedings, the AO received pieces of information from the DGIT (INV. ), Mumbai that the assessee had made purchases from the persons who were appearing in the list of hawala dealers of the Sales Tax Department. He issued notices u/s. 133(6) in order to verify the purchases made from three parties namely Harshad Ferromet (Rs. 1. 22 crores), Hans Enterprises (Rs. 1. 08 crores) and Khushal Merchantile Pvt. Ltd. (Rs. 85. 13 lacs). According to the AO none of the parties complied with the notices either on account of non-availability at given address or they did not attend before him. He directed the assessee to produce the parties and to furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchases were reflected in the stock reconciliation statement, that the AO himself had accepted that the assessee had made purchases, that he had not doubted the sales arising out of the export activities carried out by the assessee, that he had accepted the GP ratio shown by the assessee, that the entire purchase could not be treated as bogus, that the AO had made available the copies of the documents relied upon by him for purpose of making the addition, that it proved that there was no evidences to the effect that money given by cheque had come back to the assessee in form of cash, that the AO had made addition u/s. 69C of the Act with regard to the entire purchases made by the assessee whose names appeared in the website of MAHAVAT a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand he had added the income in the hands of the assessee on the ground that source of expenditure had remained unexplained, that if the expenditure itself had been rejected as non genuine then there was no question of adding any income on the ground that sources of the said expenditure had remained unexplained. He further held that no addition could be made u/s. 69C, that the basic issue was to be adjudicated as to whether any addition/disallowance was required to be made on account of the purchases from the parties from whom the assessee had purchased the goods, that the assessee should not get exemption from taxation merely because the AO had invoked the wrong provisions of the Act, that the parties from whom goods had been pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no evidence of making unexplained investment. Except issuing notie u/s. 133(6) to the suppliers of the goods, the AO has not made any further investigation. The assessee had produced before him the delivery challans, purchase bills and evidence of payment made through banking channels. Thus, the assessee had discharged the initial burden. It was duty of the AO to rebut the evidences produced by the assessee. But, he did not bring anything on record. In our opinion, the FAA had rightly held that the provisions of section 69C cannot be invoked for bogus purchases. In these circumstances, we are of the opinion that his order does not suffer from any legal or factual infirmity. The cases relied upon by him support the view taken by us. Confi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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