TaxTMI 
TaxTMI 
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
Unverifiable purchases
09 Nov 2009 
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Verification of purchases: returned supplier notices and lack of accounting evidence enable tax authority to treat purchases as unverifiable.
Whether purchases are unverifiable depends on evidentiary proof: the assessee must establish receipt, accounting, and that goods were used, sold, or held as closing stock; for manufacturing, consumption must be normal. Returned notices to suppliers or repeated address failures raise doubt, and unexplained excessive consumption or wastage can indicate bogus purchases, so confirmations alone may be insufficient to dispel the assessing officer's concerns. (AI Summary)
Whether purchases are unverifiable depends on evidentiary proof: the assessee must establish receipt, accounting, and that goods were used, sold, or held as closing stock; for manufacturing, consumption must be normal. Returned notices to suppliers or repeated address failures raise doubt, and unexplained excessive consumption or wastage can indicate bogus purchases, so confirmations alone may be insufficient to dispel the assessing officer's concerns. (AI Summary)