Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 1372 - ITAT RAJKOTAddition of bogus purchases - allegation made by the VAT Department that the suppliers are Hawala operators - Held that:- We note that the assessee has produced the bills and bank statement showing payment against the supplies received. The amount of VAT collected by the suppliers from the assessee was not paid to VAT Department. This has probably provoked the VAT Department to dub the impugned suppliers as Hawala operators. The VAT Department has finally collected the taxes from the purchaser of the goods, i.e. the assessee. Therefore, it is ostensible that the purchases are not found to be bogus per se by VAT Department. In the case of non-existing purchases, as understood by the IT Department based on the reference made by the VAT authorities, there was no occasion for the VAT authorities to collect VAT thereon. The collection of VAT tantamount to existence of transaction of purchases. The grievance of the VAT authorities was on non-payment of VAT on purchases happened. Thus, purchases made cannot be denied on the basis of aforesaid allegation. Neither has the Assessing Officer challenged the book results claimed to be reasonable by the assessee. No result of any other enquiry, if any, is recorded. There is no finding on facts adverse to the assessee except non-descript reference made by the VAT Department which, in our view, is not adequate to implicate the assessee with the charge of bogus purchase. It is pertinent herein to note that that, in the case of assessee-HUF (assessment order in file), the gross profit has been estimated by tax authorities at 11% of the Hawala purchases. In the instant case, the assessee has already declared 13% gross profit. Thus, semblance of reasonableness in book results also cannot be denied. - Decided in favour of assessee
|