| COURT: | ITAT Mumbai |
| CORAM: | N. K. Billaiya (AM), Vijay Pal Rao (JM) |
| SECTION(S): | 143(3), 145 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Bogus purchases |
| COUNSEL: | K. R. Lakshminarayanan |
| DATE: | November 28, 2014 (Date of pronouncement) |
| DATE: | April 1, 2015 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| AO is not entitled to treat all purchases as bogus merely because sales-tax department has called the seller a "Hawala dealer". The AO ought to have verified the bank details of the assessee and the seller and other evidence before treating the purchases as bogus | |
The AO has made the addition as some of the suppliers of the assessee were declared Hawala dealer by the Sales tax Department. This may be a good reason for making further investigation but the AO did not make any further investigation and merely completed the assessment on suspicion. Once the assessee has brought on record the details of payments by account payee cheque, it was incumbent on the AO to have verified the payment details from the bank of the assessee and also from the bank of the suppliers to verify whether there was any immediate cash withdrawal from their account
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