INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Bogus purchases - Assessee failed to substantiate purchases made being genuine

Assessee made purchases from three concerns. AO on the basis of information found by the Investigation Wing held that the said purchases made were not genuine and accordingly made addition of bogus purchase as the person on whose premises, search was conducted had affirmed in their statements recorded under section 132(4) that they had not sold the goods to the assessee but had provided bills and after receipts of the payments of bills, the same were refunded back in cash to the parties.Held: Assessee could not point out any material on record to show that the above concerns from whom the purchases made, were in fact carrying out any commercial activity and were maintaining stocks. Further, presumption of correctness was attached with the statement recorded under section 132(4) as it was not rebutted or uprooted by the assessee and the said statement was recorded by the officials of the IT Department during discharge of their official duties and the said statement was recorded on oath. Hence, in the facts and circumstances addition made by AO could not be held as unjustified.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2013-14

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