DCIT Vs Sincon Infrastructure Private. Ltd (ITAT Patna)
Mere Non-Filing of Returns by Suppliers Doesn’t Make Purchases Bogus – ITAT Patna Upholds CIT(A)
Assessee company engaged in the business of construction & maintenance of roads & bridges, filed return of income declaring ₹2.40 crore. The case was selected for scrutiny under CASS since substantial purchases were made from parties who had not filed returns of income. AO noted that Assessee had made purchases of ₹4.98 crore from seven such suppliers. Notices u/s 133(6) were issued, but only one party responded. AO therefore treated the entire purchases as unproved & unsubstantiated, making addition of ₹4.98 crore u/s 69C r.w.s. 115BBE.
CIT(A) noted that Assessee had submitted all evidences, including invoices, ledger accounts, payment details & GST returns. AO had not pointed out any defect in the books of accounts. It was also observed that sales were not doubted & payments were made through banking channels. Relying on judgments such as CIT vs. Odeon Builders Pvt. Ltd. (SC), Nangalia Fabrics Pvt. Ltd. vs. DCIT (Guj HC) & Nikunj Eximp Enterprises (Bom HC), CIT(A) held that purchases cannot be treated as bogus merely because suppliers did not file returns of income or failed to respond to notices. Accordingly, CIT(A) deleted the addition.
