Mere Non-Production of Original Bills will not make Purchases ‘Bogus’: ITAT [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has recently held that mere non –production of original bills would not make purchase Bogus.

Assesee-Entire Industries filed original return of income on 09.09.2015 declaring total income of Rs. 4,33,650/-. The return of income was selected for limited scrutiny.

Notice under Section 143(2) of the Income Tax Act was issued to the assessee, informing the assessee that issues related to Contract Receipts / Fees Mismatch, Sales Turnover Mismatch, Sundry Creditors and Tax Credit Mismatch are the issues identified for examination. The assessee filed details.Therafter the assessing officer made addition at 5% thereby disallowing purchase at 5% which amounted to Rs.11,31,522/-.

Assesee filed an appeal against the order of the assessing officer before CIT(A). The CIT(A) dismissed the appeal of the assessee.

M. K. Patel, counsel for the assesee submitted that Assesee filed all the documents that were asked by the assessing officer as well as the confirmation from the creditors by cross party ledgers / bills etc.

Further, assesee submitted that due to seizure by the Central Excise Department the assessee could not produce the original bills at that time but the duplicate bills are from the same source and when the purchase and sales were accepted by the Assessing Officer then on estimated basis the Assessing Officer cannot disallowed the purchase.

Sanjay Jain, Counsel for the revenue relied upon the assessment order and the order of the CIT (A).

The tribunal of Suchitra Kamble, Judicial Member, while allowing the appeal filed by the assesee, observed that assessee through its bills has established that there is a co-relation between the sales and the purchase and merely not producing original bills cannot make the purchase bogus.

Moreover the seized material by the Excise Department was also confined to the said purchase and therefore, the estimated purchases done by the Assessing Officer were held to be not justifiable.

To Read the full text of the Order CLICK HERE

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