Espee Pharma Chem Pvt. Ltd. Vs ITO (ITAT Ahmedabad)
The Ahmedabad Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal and deleted the addition of ₹42.95 lakh made under section 69C on account of alleged bogus purchases. The reassessment was initiated based on information from the Insight Portal alleging bogus purchases from M/s Biotavia Labs Pvt. Ltd. Although a survey in the seller’s case revealed a general admission of providing accommodation entries, the Tribunal held that such a blanket statement cannot automatically render all transactions bogus.
The Tribunal noted that the assessee had discharged its onus by furnishing complete documentary evidence including purchase invoices, e-way bills, transportation details, bank statements evidencing payments through banking channels, confirmation from the supplier, and corresponding sales of the purchased goods. There was no adverse finding on transportation documents, nor any evidence of cash being routed back to the assessee. The AO’s sole reliance on non-response to notice under section 133(6) and a general survey statement, without independent verification or allowing cross-examination, was held to be insufficient.
Accordingly, the ITAT held that the purchases were genuine and deleted the entire addition. Grounds relating to reopening and certain legal pleas were dismissed as not pressed, while the substantive ground on bogus purchase succeeded. The appeal was thus partly allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
