Question And Answer
Subject: Non Genuine Purchases
Querist: manali
Answered by: Reply of the Expert is awaited;
Date: January 2, 2023
Query asked by manali

Assessee is private limited co engaged in the manufacturing of steel plates. during the course of assessment proceedings for A.Y. 20-21, AO has asked to submit the details of purchases.  on the basis of details furnished by the assessee co, AO has issued summons U/Sec. 131 to the one of the supplier, who has appeared and given all the documents which have been asked by the AO and also submits the details of the party from whom he had effected purchases the material which has sold to the assessee co.  On verification of the details A.O found that the parties from whom the supplier had effected the purchases are non genuine and their GST Numbers were also cancelled on the ground of involvement in Fake invoicing. The assessing officer of the assessee co and the supplier is same.

Assessing officer has made the addition of Purchases effected by assessee co from this supplier on the ground that his suppliers are non genuine.

Assessing officer in the hands of supplier has also made the addition of the purchases effected from the parties , however accepted the sales made by it to different parties including the assessee co .

Issues :

  1. whether addition made by the AO in the hands of assessee co on the ground that parties from whom supplier has effected the purchases are non genuine and non existent.
  2. When the same AO has accepted the sale of the supplier , whether  the addition in the hands of assessee co is   justified.
  3. Copy of the statement of the supplier has not been provided to the assessee co, In the said statement , he has confirmed the transaction of  purchases with the assessee co.
  4. when the assessee co has given all the evidences and even supplier has also appeared and accepted the transcation, whether assessee is liable to explained the genuineness  of purchases of supplier also, like U/Sec. 68 source of source also needs to be explained.


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Answer given by
Reply of the Expert is awaited. Please check back later

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