2012 (4) TMI 751 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition of Rs. 14,40,936 made by Assessing Officer on account of bogus purchases for assessment year 2007-08.

Assessment of Bogus Purchases:
- The assessee, a sole proprietor of M/s Jaipur Beads, faced a reassessment based on information about fictitious transactions with Shri Anshu Gems, Jaipur.
- Despite providing bank statements and denials of bogus purchases, the Assessing Officer added Rs. 14,38,060 to the assessee's income, citing lack of individual item-wise stock register and absence of evidence for goods delivery.
- The CIT(A) found merit in the assessee's submissions, noting payments made by cheque based on bills received, and deleted the addition due to insufficient evidence of bogus purchases by the Assessing Officer.

Appellate Tribunal Decision:
- The Department contended that the addition was justified as M/s Anshu Gems admitted to supplying bogus bills during a survey.
- The Department argued that the CIT(A) erred in disregarding the alleged bogus purchases.
- The Tribunal held that without specific evidence, purchases cannot be labeled as bogus, emphasizing that the Assessing Officer's decision relied solely on the DIT report without disproving the monthly purchase bills or cheque payments.
- Consequently, the Tribunal confirmed the CIT(A)'s decision to delete the addition, dismissing the revenue's appeal.