The AO or the FAA have not rejected the books of accounts of the assessee nor have doubted the purchases made by it. The recognized principles of accountancy and tax jurisprudence hold that no sales can take place without purchases. Thus, the case under appeal is not about non genuineness of purchases itself, but it is about non genuineness of suppliers. Whether provisions of section 69C of the Act can be applied in the matters where all the purchase and sales transactions part of regular books of accounts. Basic precondition for invoking the section 69C is that the expenditure incurred by the assessee should be out of books of accounts. Here, the payments to the suppliers, as stated earlier, have been made by cheques. So, it cannot be held that expenses were incurred by the assessee outside the books of accounts.
FULL TEXT OF THE ITAT JUDGMENT
Challenging the order dated 21/01/2016 of CIT(A)-42, Mumbai the Assessee is in appeal for the above mentioned two assessment years (AY.s). The assessee is engaged in the business of trading of ready made-garments.As the issues involved in both the years are, so, we are adjudicating both the appeals together.The details of date of filing of return, income declared, assessed income, dates of assessment orders etc. can tabulated as under :-
