Unverifiable purchases

[GYAN JAIN]

THE AO ISSUED NOTICE U\S 131 TO THE PURCHSERERS AND SOME NOTICE RETRUN BACK AS MARK NOT FOUND OR ADDRESS IS NOT CORRECT , WHETHER THE AO CAN DEEMED SUCH PURCHASESAS UNVERIFIABLE PURCHASES , WHILE CONFIRMATIONS FROM ALL THE PURSHASERERES ARE SUBMITTED BY THE ASSESSEE TO AO . ADVISE ME

[DEV KUMAR KOTHARI]

I think the AO issued notices to Suppliers of assessee and not to purchasers- there seems a mistake in your query. Besides confirmation of purcahses from suppliers you need to establish that goods were received, accounted for and used/ sold or held as closing stock to establish that the purchases are genuine. In case of manufacturing activity consumption of material should be normal and not excessive. If excessive consumption is shown or excessive wastage is shown, without valid reason, then there can be doubt of bogus purchases.

[Mukesh Kumar]

It is matter of evidence and proof. Why the letters return back as Mark not found or address not correct. One case or two case may be exceptional but each case! unbelievable. It means, there is something which is doubtful. All depend upon that how you are able to prove the genuineness and reasons to prove your transactions.

AI Summary

Can Assessing Officer Deem Purchases Unverifiable Due to Returned Notices Under Section 131? Evidence and Credibility Debated. An individual raised a query regarding income tax, questioning whether the Assessing Officer (AO) can deem purchases as unverifiable when notices issued under Section 131 to purchasers were returned due to incorrect addresses, despite the assessee providing confirmations. A respondent suggested the notices were likely meant for suppliers, emphasizing the need to prove receipt and proper accounting of goods to establish genuine purchases. Another respondent highlighted the importance of evidence and questioned the credibility of all notices being returned, suggesting underlying issues with the transactions' authenticity.