Section 68 Addition cannot be made for purchases

ACIT Vs Yogesh Mulwani (ITAT Lucknow)

ITAT held that Addition under section 68 of Income Tax cannot be made for purchases as purchases is an expense which is debited in books and not a loan or deposit which is credited in books

FULL TEXT OF THE ORDER OF ITAT LUCKNOW

This is Revenue’s appeal against the order of the ld. CIT (A)-1, Lucknow, dated 23.9.2020 for the Assessment Year 2016­17, raising the following grounds of appeal:

1. The Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs.1,61,64,481/- made by the AO under the head “Sundry Creditors” as the assessee failed to substantiate the genuineness and creditworthiness of the creditors.

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