INCOME TAX ACT, 1961

Section 69C

Income from undisclosed sources - Addition under section 69C - Addition made on the basis of peak purchase deleted by CIT(A) - No contrary material brought on record by AO to prove the purchases as bogus

AO received information from Dy. DIT (Inv.), in which it was conveyed that assessee had taken bogus purchase entries. Doubtful purchase was found in sum of Rs. 39 crores for financial years 2005-06 to 2012-13. AO issued the notices under section 133(6) which were not served. Thus, AO raised addition on the basis of peak purchase of Rs. 1 crore. CIT(A) deleted the same on the basis of fact that assessee's unit was 99% exports unit and sale was supported by documents of export and stock register confirmed sale and purchase. The Tax Audit Report confirmed the same and stock statement produced to banks was subjected to verification of third party and assessee was having its own vehicle for transporting of goods from one place to another. AO challenged this. Held: AO nowhere brought any substantial material to prove the fact that purchase was bogus. Documents relied upon by CIT(A) were already available with AO which were not considered and discussed. CIT(A) considered all the relevant material on record and arrived at conclusion that addition was not based upon any material on record and no distinguishable material was produced on record which required interference with the order passed by CIT(A). In view of all the facts and circumstances, order of CIT(A) was sustained as valid.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

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