Ramakant Bhuvan Vs ITO (ITAT Pune)
Suppliers Ignoring Section 133(6) Notices Alone Can’t Make Purchases Bogus: ITAT Gives Fresh Lifeline to Liquor Trader
The Pune ITAT held that merely because suppliers failed to respond to notices issued under section 133(6), the entire purchases cannot automatically be treated as bogus when the assessee possesses substantial documentary evidence proving the transactions.
In the case of Ramakant Bhuvan, a liquor trader, the AO had added ₹3.68 crore as inflated purchases under section 37(1) solely because five out of six liquor suppliers did not respond to notices issued during assessment proceedings.
The Tribunal observed that apart from the alleged non-compliance by suppliers, the AO had not pointed out any defect whatsoever in the assessee’s books, stock records or purchase documentation. The assessee had produced purchase invoices, transport permits (Form FL-1A), stock registers, quantitative details certified in Form 3CD, supplier ledger confirmations, bank statements evidencing payments through banking channels and proof of TCS appearing in Form 26AS.
The ITAT further noted that the assessee had also sought admission of additional evidence before the CIT(A) under Rule 46A, but the same was ignored without proper consideration.
Observing that the State Excise Department had also verified the stock movement and that the assessee maintained regular stock-in and stock-out records, the Tribunal held that the authorities ought to have properly examined the documentary evidence instead of mechanically treating the purchases as bogus.
The matter was therefore restored back to the AO for fresh verification after granting adequate opportunity to the assessee.
FULL TEXT OF THE ORDER OF ITAT PUNE
