· The AO observed that the name of M/s Mahaveer Textile Mills was appearing in the list of creditors for the year. Information u/s 133(6) of the Act was called for and summon was issued to the party u/s 131 of the Act for personal appearance.
· On non-compliance of the same, the AO treated the entire purchase transaction as non-genuine and bogus and added the same to the income of the assessee.
· The Ld. CIT(A) further confirmed the disallowance made by the AO stating that a simple confirmation was not sufficient to establish the fact of purchase to be genuine.
· During the course of proceedings before the Tribunal, the assessee submitted the following facts:
(i) Books of accounts of the assessee were audited, vouched, verified and were not rejected by the AO or the CIT(A)
(ii) The copies of purchase bills and confirmation from the party was provided to the AO
(iii) The amount outstanding in the name of the party was subsequently paid, for which the bank statement was also provided to the AO
· Considering the above facts, the Hon’ble Tribunal deleted the addition sustained by the CIT(A) and asserted its view that merely the non-appearance of the supplier, in absence of any other corroborate evidence, cannot be a basis to justify the stand of the Revenue that the transaction of purchase is bogus.
For further reading, refer the attachment.
Further Reading