Patel Kenwood Pvt Ltd Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition towards bogus purchases made without proper verification of facts but just on the basis of suspicion, surmises and unverified information unjustified and liable to be deleted.
Facts- The assessee is a company engaged in the business of imported wood and Eco-friendly particle Boards. The case was selected for scrutiny assessment. AO noticed that the purchases made from M/s. Laxmi Enterprises as bogus transaction. Therefore AO issued a summon u/s. 133(6) of the Act on 06-12-2019, however there was no response from M/s. Laxmi Enterprise. Since M/s. Laxmi Enterprises is listed as a defaulter in the website of Gujarat Sales Tax and Commercial Tax Department, the purchases of Rs.43,95,474/- made from M/s. Laxmi Enterprises was treated as bogus and added as the income of the assessee.
CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that the addition made by the Lower Authorities are without proper verification of facts, but just on the basis of suspicion, surmises and unverified information on records. Further it seen from the assessment order that the representative of M/s. Laxmi Enterprises appeared before the Assessing Officer however his submission is not recorded on the ground that no evidences submitted by the AR. It is in this context, the Ld.AO and after verification of the website of the Commercial Tax Department treated the purchase as bogus and added Rs.43,95,474/- as the income of the assessee which in our considered view is liable to be deleted.
