Case Law Details
Trushar Parimal Shah Vs ITO (ITAT Ahmedabad)
The addition in the present case was made under section 69C of the Act on account of unexplained expenses. Indeed, the primary onus lies on the assessee to justify the expenses claimed by him. However from the preceding discussion, we note that the assessee has discharged his onus by furnishing the copy of the ledger of the parties where the addresses of such parties were mentioned. In case, there is any doubt on the genuineness of the transactions from the so-called parties, the AO should have exercised his power granted under these statute under section 133(6)/131 of the Act by issuing notices for the purpose of the confirmation. But the AO has not done so.
Similarly, we are not convinced with the finding of the Ld. CIT(A) that the assessee was under the obligation to produce the impugned parties. It is because, the assessee cannot under any law enforce the attendance of such parties whereas the Revenue was empowered under the statute to call upon such parties.
We also note that the assessee has claimed to have made sales against such purchases which have been admitted by the Revenue. As such in our considered view, such sales cannot be executed without having the corresponding purchases. There was no defect pointed out by the authorities below insofar the sales made against such purchases. Moreover, there is also no allegation regarding the genuineness of the books of accounts which were duly audited under the Income Tax Act.
However, before parting we cannot ignore the practice prevailing in the business industries to purchase the goods from the grey market and subsequently justify such purchases by obtaining a purchase bill from the parties engaged in providing accommodation entries. It is because the assessee in the present case has claimed to have purchased the goods from the parties not having valid VAT/CST registration certificate though he is claiming to have purchased goods from the registered party. Moreover, there was no submission from the side of the assessee against the finding of the authorities below about the cancellation of the registration certificates of the impugned parties. In view of the above, we can presume that the actual purchases were made by the assessee from the grey market but shown in the name of impugned parties. Our presumption is also fortified as the assessee has not produced any evidence for the payment against such purchases.
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