| The Tax Publishers2020 TaxPub(DT) 3474 (Del-Trib) INCOME TAX ACT, 1961
Section 69C
Where purchases of TMT bars made by assessee were reflected in subsequent assessment year, i.e., 2012-13 and during the search no incriminating documents were found, further, AO proceeded on the basis of mere assumption that purchases were bogus, despite knowing the fact that purchases were reflected in the books of accounts for assessment year 2012-13, since assessee had shown the purchases and quantification was based on the evidences/documents placed on record, therefore, addition under section 69C could not be made.
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Income from undisclosed source - Addition under section 69C - Bogus purchase - Purchase reffected in subsequent year
A search was conducted at the residence of assessee, certain documents were found and seized. On the perusal of bills found and seized, AO observed that TMT Bars were claimed to be purchase from two companies. Inspectors were sent to make enquiries about the genuineness of purchase of TMT Bar as the said documents were purchased bills for purchase of TMT Bars. Director of assessee submitted that the said purchases were paid through banking channels and goods was received as evidence by Dharam Kanta receipts as well as transport documents. AO observed that purchases were not debited in profit and loss account as the said documents were seized at the time of search operation. AO came to conclusion that documents seized during the course of search operation established beyond doubt that material been purchased as well as delivered to assessee, at its site as documents seized including bill/cash memo, transporters slip and the weighing slip. AO concluded that purchases made by assessee could not be explained and thus, made addition under section 69C. Held: Purchases were actually made and the same was not disputed by Revenue Authorities at any point of time. From the perusal of the assessment order, these purchases of TMT bars were reflected in subsequent assessment year i.e. 2012-13, the purchases were shown by assessee in subsequent year. In fact, during the search no incriminating documents were found. AO proceeded on the basis of mere assumption that purchases were bogus despite knowing the fact that the purchases were reflected in books of accounts for assessment year 2012-13. Since assessee had shown purchases and quantification was based on the evidences/documents placed on record, therefore, purchases cannot be held unexplained under section 69C.
Followed:CIT v. Jansampark Advertising and Marketing Pvt. Ltd. ITA No. 525/2014 Order, dated 11-3-2015 : 2015 TaxPub(DT) 992 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12 & 2012-13
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