Case Law Details
Accra Pac(India) Pvt. Ltd Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that only certain percentage of alleged bogus purchases should be disallowed. Disallowance of entire alleged bogus purchase unjustified when corresponding sale of finished product has been subjected to tax.
Facts-
The assessee is a manufacturer of perfumes and other beauty products. During the year under consideration, the assessee purchased chemicals amounting to ₹ 77,12,502/- from M/s Virat Enterprises. During the course of assessment, the AO observed that the assessee has not furnished PAN number of the party from whom the purchase have been made and the assessee had also not produced confirmation of the party. The assessee submitted that the party M/s Virat Enterprises had shut down its business and hence it was not possible for the assessee to produce a confirmation from the party in respect of the purchases made. However, the assessee submitted that the purchases were backed by delivery challans and also the fact that the purchases were made through banking channels.
AO held that the purchases were not genuine and added back the same as bogus purchases on the ground that the assessee has not been able to prove the identity, genuineness and creditworthiness of the party. CIT(A) confirmed the addition.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
