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| The Tax Publishers2020 TaxPub(DT) 3366 (Del-Trib) INCOME TAX ACT, 1961
Section 69C
In case notice under section 133(6) was issued after a gap of 8 years on address mentioned in the then invoice and if it had not been served then it could not be held that concerned purchase was bogus and when purchases were duly accepted by VAT Department including sales and manufacturing account and quantity utilized for manufacturing had not been disputed and trading account and books of account had not been rejected, then no separate addition on account of purchase could be made.
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Income from undisclosed sources - Addition under section 69C - Purchases made 8 years earlier alleged as bogus on acount of section 133(6) notice retrned unserved - Purchases accepted by VAT department and no dispute as regards quantitative details
Assessee was engaged in manufacturing and job work of industrial tools and machine components. AO received information as to assessee having obtained accommodation entries of bogus from M/s. 'M'. Accordingly, AO issued notice under section 133(6) to M/s. M which returned back undelivered stating 'incomplete address'. Accordingly, AO treated related purchases as bogus and made addition under section 69C. Held: The dispute was regarding purchase of alloy steel from M/s. 'M' was on manufacturing account. Neither stock register nor any items of purchase and sales had been disputed by AO, except for purchases made from M/s. Maa Durga Trading Company for sums aggregating to Rs. 13,09,552, which has been made solely on the reason that notice under section 133(6) issued to the said party remained un-served. If assessee had made purchases in the year 2007 and notice under section 133(6) was issued after a gap of 8 years on address mentioned in the then invoice and if it had not been served then it could not be held that purchase was bogus. Had assessee not corroborated the purchase from other documentary evidences, perhaps then adverse inference could have been drawn. One of the clinching evidence was the transit challan issued by VAT Department, Haryana along with purchase invoice which clearly proved that purchases made from said party was actually delivered to assessee and payment has been made through account payee cheque, i.e., the source of purchase was from the books only. Thus, under the facts and circumstances, when purchases were duly accepted by VAT Department including sales and manufacturing account and quantity utilized for manufacturing had not been disputed and trading account and books of account had not been rejected, then no separate addition on account of purchase could be made.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
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