The Tax Publishers2021 TaxPub(DT) 0308 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Where assessee failed to discharge burden of establishing genuineness of purchases and further, notices issued under section 133(6) elicited no response and the assessee also failed to produce even a single supplier to confirm the transactions; the estimation of 12.5% made by AO against such purchases would be sustainable.

Income from undisclosed sources - Addition under section 68 - Bogus purchases - Assessee failed to discharge burden of establishing genuineness of purchases

AO found that assessee-company obtained accommodation entries of bogus purchases. Accordingly, the assessee was directed to substantiate the purchase transactions. Although, the assessee filed copies of purchase bills, ledger accounts and bank statements evidencing payments through banking channels. However, notices issued under section 133(6) to confirm the transactions were returned back unserved. Further, the assessee failed to produce any of the suppliers for confirmation of accounts and also failed to file complete details. Therefore, the AO opined that the assessee failed to discharge the onus casted upon it to establish genuineness of the purchases and accordingly, he estimated addition of 12.5% against the purchases. Held: Assessee remained unsuccessful in discharging burden of establishing genuineness of purchases. Further, notices issued under section 133(6) elicited no response and the assessee also failed to produce even a single supplier to confirm the transactions. Therefore, the revenue had no option but to make estimated addition against such suspicious purchases. No new material had been brought by the assessee before the Tribunal to substantiate its claim. Therefore, the estimation of 12.5% as made by the AO against such purchases was upheld.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2013-14



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