INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Bogus purchases -

Assessee was engaged in the business of fabrication and construction activity. Case of assessee was manually selected for scrutiny. In scrutiny assessment proceedings, AO made addition under section 68 on account of bogus purchases. The said addition was made on the basis of alleged concession recorded by Chartered Accountant of assessee. Department submitted that assessee failed to provide the details of purchase and transportation of material. Assessee could not furnish Truck number, transport challan, delivery challan, toll tax receipt, etc. to show purchase and movement of goods from the suppliers to premises of assessee. Held: A glaring fact that was brought to notice was that assessment order was passed on the very same day after the Chartered Accountant of assessee filed letter agreeing for the addition. Probability of averments in the affidavit being true is quite high in the light of fact that assessment was completed by AO on the same date when Chartered Accountant of assessee agreed for addition. Assessee had furnished confirmation letters from suppliers of material and also furnished various details of suppliers such as name, address, PAN, etc., of suppliers to prove the source, identity and genuineness of suppliers. Assessee in an endeavor to prove the genuineness of transactions and suppliers had furnished the copies of return of income of suppliers before CIT(A). Thus, no infirmity in order of CIT(A) in deleting addition.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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