Trigyn Technologies Ltd. v. Asstt. CIT & Vice-Versa [ITA No. 1986/Mum/2012, ITA No. 3012/Mum/2012, dt. 20-4-2016] : 2016 TaxPub(DT) 2202 (Mum-Trib)

Purchase of computer hardware found to be bogus whether additions sustainable?

Facts:

Assessee purchased 500 computer hardware from two vendors. The same was suspected to be bogus thus entire addition of assets was disallowed and on appeal ITAT remanded the case by giving fresh opportunity to the assessee. On second round the said two vendors could not be produced as they had migrated to Kuwait and had resigned from the directorships of the two companies. However on survey it was found to be that Octroi demand was raised on the assessee by the Govt. on said purchase from outside the state. Survey also showed that some computers were found but since a complete survey at all locations was not done the entire purchase could not be verified. Bank averments also showed payments from the assessees account to the vendors for purchase. Nonetheless the additions were sustained by assessing officer in round 2. On appeal:

Held in favour of the assessee that the addition of computers was found to be genuine and the assessee has given valid reasons for not being able to summon the vendors. Other corroborative evidences and Octroi point to the acquisition thus depreciation is to be allowed on the purchase of fixed assets.

Note: The way the case has travelled or taken a turn makes it a unique one.