|The Tax Publishers2021 TaxPub(DT) 0829 (Visakhapatnam-Trib)
INCOME TAX ACT, 1961
Where assessee explained that the difference between the VAT returns and the books of account maintained by the assessee in respect of purchases was due to exempted purchases which were not reflected in the VAT returns and where no defect was also found in the books of account, addition made by AO on account of unaccounted purchases required to be deleted.
Income from undisclosed sources - Addition under section 68 - Unaccounted purchases - Satisfactory explanation provided by assessee
AO found that as per the VAT return, there was difference between the VAT returns and the books of account maintained by the assessee in respect of purchases and assessee could not also reconciled the difference, made the addition thereof. Held: There was no dispute that the purchases were duly accounted in the books of account. The assessee explained that the difference was due to exempted purchases which were not reflected in the VAT returns. Since there was no defect found in the books of account and AO did not make out a case that the assessee had overstated the purchases, there was no reason to make the addition. Hence, addition made by the AO was deleted.
FAVOUR : In favour of assessee.
A.Y. : 2010-11
IN THE ITAT, VISAKHAPATNAM BENCH
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