bogus purchase

[vipul shah]

judgemnt related to bogus purchase kindly give us some judgement on this issue

[CAGOPALJI AGRAWAL]

If the assessee admits bogus purchase, there is hardly any excuse. Yes, a possibility may be explored whether the bogus purchase has been entered into stock register or the quantity purchased through bogus purchase has been sold?

[DEV KUMAR KOTHARI]

Please see reply in issue no. 1565

There may be many factors which have contributed for getting the case in favor of assessee. As you have described in your query it is case of bogus purchase. I like to suggest that you, if the case is at assessment stage, you must focus on facts of the case instead of reference to any case laws. Once you put a case law before AO, he may take the note the that case and may make the observattions more stronger after removing the weakness in the case. Date of submission: - 23-10-2009 By: - Rama Krishana

Case is alredy decided and ar appeal stage Case law citation :16DTR278 , CIT V\S SINUJA FOODS LIMITED required Date of submission: - 24-10-2009 By: - GYAN JAIN

Bogus purchases are definately disallowable. However, there is difference in bogus and suspected purchases. If it is a case of suspecion in mind of authoriteis, you must clear their suspecion by giving evidence - purchase order, purchase memo= bill , cash memo, challn etc. CNote etc. as delivery evidence as may be applicable, delivery received- entry in GR register and /or stock register, consumption or sale of goods suspected, revenue therefrom credited in P & l a/c ec. External and third party evidences like transporters note, insurance policy cover, etc. ill be highly useful. A party who supplied goods, may not be available, may not co=operate, that does not mean that goods were not purchased. It is function of the revenue authorites to catch hold of such parties and not to penalise the party who is availabel for harrassment in course of assessment or appeal etc. If purcahse is establsihed, it cannot be bogus. The supplier may be a fly-by- night party or a person who has changed business, location etc. Those factors will not make a real purchase as a bogus purchase. Date of submission: - 28-10-2009 By: - DEV KUMAR KOTHARI- View Profile

AI Summary

Bogus purchase determination: require contemporaneous documentary and third party evidence to establish genuineness in assessments. Bogus purchases require contemporaneous documentary and third party evidence to establish genuineness: purchase orders, bills, delivery challans, transport/GR notes, stock register entries, and accounting for consumption or sale. Supplier non cooperation does not by itself prove a purchase false; if purchase is established from available records, it cannot be treated as bogus. At assessment stage, focus on facts and primary evidence rather than immediate reliance on case law.