2015 (7) TMI 1190 - AT - Income Tax

Tribunal affirms deletion of addition under Sec. 69C, emphasizes need for purchase details

The Tribunal dismissed the Revenue's appeal against the deletion of an addition under Sec. 69C of the Act, affirming the Ld. CIT(A)'s decision. The ... Addition invoking the provisions of Sec. 69C - Held that:- It is an undisputed fact that no adverse finding has been given in so far as sales are concerned. It is a settled proposition that without purchases, there cannot be any sales. It is also an undisputed fact that no adverse inferences have been drawn in so far as the purchase invoice of M/s. Kripa Multi Trade Pvt. Ltd is concerned. We find that the assessee has filed complete details of purchases above ₹ 2, 00,000/- made during the year under consideration. The details are exhibited at pages 22 & 23 of the paper book. We also find that the payments made by the assessee towards purchases are duly reflected in the bank statements of the assessee which are exhibited at pages 71 to 80 of the paper book. Considering all these facts in the light of the decision of the Hon’ble Jurisdictional High Court in the case of CIT Vs M/s. Nikunj Eximp Enterprises Pvt. Ltd [2013 (1) TMI 88 - BOMBAY HIGH COURT ] which has been considered and relied upon by the Ld. CIT(A), we do not find any reason to interfere with the findings of the Ld. CIT(A) n delting addition - Decided in favour of assessee. Issues:Appeal against deletion of addition under Sec. 69C of the Act.Analysis:1. The Revenue appealed against the deletion of an addition of Rs. 1,27,54,500 made by the Assessing Officer (AO) under Sec. 69C of the Act.2. The assessee, a registered firm engaged in trading, was questioned about purchases debited in the profit & loss account.3. The AO found suspicious purchases from a party based on information from the Sales tax department, leading to the addition of Rs. 1,27,54,500 as unexplained expenditure under Sec. 69C.4. The Ld. CIT(A) considered the submissions, noting that all purchases were recorded in the books, payments were made by crossed cheques, and sales were accepted by the AO without discrepancies.5. The Ld. CIT(A) emphasized the need for corroborative evidence beyond suspicion, highlighting the lack of independent inquiries by the AO.6. The Revenue challenged the Ld. CIT(A)'s decision, supported by the Departmental Representative.7. The Tribunal upheld the Ld. CIT(A)'s findings, citing the necessity of purchases for sales and the absence of adverse findings on purchase invoices, complete purchase details, and reflected payments in bank statements.8. Relying on a High Court decision, the Tribunal dismissed the Revenue's appeal, affirming the Ld. CIT(A)'s decision.This detailed analysis of the legal judgment highlights the key issues, arguments, and decisions involved in the case regarding the addition under Sec. 69C of the Act, providing a comprehensive overview of the proceedings and outcomes.