|CORAM:||Ashwani Taneja (AM), Saktijit Dey (JM)|
|CATCH WORDS:||Bogus purchases, Bogus Sales|
|DATE:||February 24, 2016 (Date of pronouncement)|
|DATE:||May 6, 2016 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|Bogus Purchases: Purchases cannot be treated as bogus is (i) assessee has furnished quantitative reconciliation, (ii) Gross Profit rate is comparable to earlier & subsequent years, (iii) suppliers are income-tax assessees and their sales have not been treated as bogus by their AOs, (iv) payments are by account payee cheques and other documentary evidences are available|
It is a fact on record that during the year assessee has disclosed sales turnover of Rs. 537 crore and before the first appellate authority assessee has furnished quantitative reconciliation of the purchase and sales. It is also observed that gross profit rate shown by the assessee for the impugned assessment year @ 14.54% is comparable to gross profit rate shown in the preceding as well as subsequent assessment year. Another crucial fact which commands consideration is, all the suppliers are income tax assessees and as per the evidence produced on record they have disclosed these sale transactions in the books of account as well as return filed by them. However, no adverse inference has been drawn in respect of sales made by them by concerned Assessing Officers to the effect that they are not genuine parties or they are providing accommodation bills only. At least, no such fact is forthcoming from assessment order nor the department has filed any paper book before us to demonstrate that there is any adverse material in the possession of the Department to establish that concerned suppliers are non-genuine and are providing accommodation bills. In contrast, enough documentary evidences by way of purchase bills, sales bills, ledger copies of suppliers, etc., along with the fact that payments were made through cheque has been brought on record by assessee to demonstrate that purchases made from the concerned suppliers are genuine. In addition, it is a fact on record that not only the entire purchase transaction has been reflected in assessee’s books of account but the sales effected by concerned suppliers are also recorded in their books of account which were submitted before the Assessing Officer as well as first appellate authority. Moreover, all the suppliers are identifiable persons with PAN and are assessed to income tax regularly. There is no material before us to show that sales effected by these persons have been held to be non-genuine at their hands in any income tax assessment proceedings. Thus, when the sales effected by the suppliers are accepted in their hands, purchases made from them by the assessee cannot be held to be non-genuine. In these circumstances, as the Department has failed to bring any substantive evidence / material to controvert the findings of the learned Commissioner (Appeals), we are not in a position to disturb the order of the learned Commissioner (Appeals). In the aforesaid view of the matter, we uphold the order of the learned Commissioner (Appeals) by dismissing the grounds raised by the Department.