2018 (10) TMI 287 - AT - Income Tax

Bogus purchases u/s 69C on account of substantiated creditors - Held that - Information was given by the assessee in 154 proceedings, which were rejected by the AO. Hence addition on information received with respect to the supplier, CIT (A) deleted the addition of ₹ 3198701/-. With respect to other parties similar matter existed and confirmation was received so the ld CIT A deleted the addition. The facts submitted in para no three of the order was not controverted by the ld DR. With respect to only on party information was not received where the addition was only of ₹ 38930/- which has been verified by the CIT (A) that in subsequent period, the payment has been made by assessee by cheque and it was confirmed through the bank statement of the assessee as stated by the CIT A. So the whole addition was deleted. DR also could not show that where the ld CIT A has gone wrong. We have also carefully seen the reason given by the CIT A in para no three of his order and we do not find any infirmity in his order. We uphold the order of the CIT-A deleting the above addition of ₹ 3198701/- and ₹ 2360970/-. - Decided against revenue.

Summary

Issues:
Appeal against deletion of addition on account of bogus purchases under section 69C and substantiated creditors.

Analysis:
1. The appeal was filed by the Income Tax Officer against the order of the Commissioner of Income Tax (Appeals) concerning M/s K. B. Contract (P) Limited for the assessment year 2012-13. The main ground of appeal was the deletion of additions made on account of bogus purchases and substantiated creditors.

2. The assessee, engaged in government contracting, filed a return of income showing a certain amount. During assessment, discrepancies were found in bills related to generator purchases from a party. The Assessing Officer treated these as unaccounted purchases and made additions. Notices were issued to suppliers, and based on responses and lack of information, further additions were made under section 69 of the Income Tax Act.

3. The Commissioner of Income Tax (Appeals) deleted the additions after considering explanations and evidence provided. The departmental representative argued in favor of the Assessing Officer's order, emphasizing the unreconciled differences and lack of supplier information. The Authorized Representative supported the Commissioner's decision, highlighting the absence of discrepancies in supplier balances as per books and confirmations received.

4. The Tribunal reviewed the contentions and lower authorities' orders. It noted that the Commissioner deleted the additions based on explanations and evidence provided during proceedings. The Tribunal upheld the Commissioner's decision, stating that no errors were found in the deletion of additions related to bogus purchases and substantiated creditors.

5. Ultimately, the Tribunal dismissed the appeal of the Income Tax Officer, affirming the Commissioner's order to delete the additions. The decision was pronounced in open court on a specified date.

This detailed analysis outlines the issues raised in the appeal, the arguments presented by both sides, and the Tribunal's decision to uphold the deletion of additions made by the Assessing Officer, providing a comprehensive understanding of the legal judgment.