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Tribunal Upholds Assessee's Appeal: Purchases Deemed Genuine, Disallowance Reversed for AY 2013-14 Under Sufficient Evidence The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal regarding the disallowance of unverifiable purchases for AY 2013-14. It ...
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Tribunal Upholds Assessee's Appeal: Purchases Deemed Genuine, Disallowance Reversed for AY 2013-14 Under Sufficient Evidence
The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal regarding the disallowance of unverifiable purchases for AY 2013-14. It concluded that the purchases were genuine, as they were duly reflected in the books of account and supported by affidavits and supplier responses. The Tribunal found no basis for additions based on past search reports. Specifically, for purchases from Anshika Jewellers, the Tribunal determined that sufficient evidence was provided by the assessee, and the supplier's non-response to notices was insufficient to justify disallowance. The order was pronounced on 26.07.2023.
Issues involved: The judgment involves the dispute regarding the disallowance made for unverifiable purchases in cross appeals by the assessee and the Revenue for AY 2013-14.
Details of the judgment: 1. The assessee, an ownership firm trading in jewellery, filed the return of income for AY 2013-14 declaring total income of Rs. 3,82,119. The ld. AO observed unverifiable purchases made through certain parties and disallowed a sum of Rs. 2,67,66,150. 2. The assessee provided various details to prove the genuineness of purchases, including affidavits, bank statements, and VAT registration certificates. However, the ld. AO disbelieved the documents and treated the purchases as bogus. 3. In the case of purchases from M/s Anshika Jewellers, the ld. AO disallowed Rs. 84,82,500 as the supplier did not respond to notices. The ld. CIT(A) upheld the disallowance based on a gross profit rate of 19.84%. 4. The assessee appealed, presenting all relevant documents and arguing that the purchases were genuine. The ld. AO's reliance on search statements from previous years was challenged. 5. The Tribunal found that the purchases were duly reflected in the books of account, supported by affidavits and responses from suppliers. It held that no addition could be made based on past search reports and that the purchases should be considered genuine. 6. Regarding the purchases from Anshika Jewellers, the Tribunal noted that the assessee had provided sufficient evidence, and the non-response of the supplier to notices did not justify disallowance. The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal. 7. The Tribunal pronounced the order on 26.07.2023, allowing the assessee's appeal and dismissing the Revenue's appeal.
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