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TMI Blog2018 (12) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be allowed as bad debt. Since the aforesaid aspect has not been considered by the Departmental Authorities, restore the issue to the file of the Assessing Officer for denovo adjudication Addition of bogus purchases - AO has made the addition primarily for the reason that the notices issued under section 133(6) could not be served on the concerned parties - Held that:- Of–course, AO has also observed that the assessee failed to produce the concerned parties before him. However, it appears from the record that the assessee has furnished quantitative tally of the goods purchased it is also a fact that the Assessing Officer has not disturbed or doubted the sales affected by the assessee. In these circumstances, the entire purchases can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue : Shri S.K. Bepari ORDER Aforesaid appeal has been filed by the assessee challenging the order dated 16th November 2017, passed by the learned Commissioner (Appeals) 28, Mumbai, for the assessment year 2010 11. 2. In ground no.1, the assessee has challenged addition of ₹ 1,97,388, made under section 69C of the Income Tax Act, 1961 (for short the Act ). 3. Brief facts are, the assessee a partnership firm is engaged in wholesale business of all types of hardware industrial consumables. For the assessment year under dispute, the assessee filed its return of income on 26th November 2012, declaring nil income. During the assessment proceedings for verifying the sundry creditors, unsecured loans, etc., the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as shown excess receivable of ₹ 1,97,388. He submitted that the said difference is due to rate difference, debit note, etc. As such, there cannot be any income due to above difference that too towards unexplained expenditure under section 69C of the Act. He submitted that even if there is a difference, it has to be treated as bad debt. Therefore, no addition under section 69C of the Act can be made. 5. The learned Departmental Representative relied upon the observations of the Assessing Officer and the learned Commissioner (Appeals). 6. I have considered rival submissions and perused materials on record. The disputed addition of ₹ 1,97,388, has been made on account of the difference in outstanding balance shown in the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. Alleging that the assessee could not prove the genuineness of the genuineness made from the concerned parties, added back the amount of ₹ 2,14,346. 9. The learned Commissioner (Appeals) also sustained the addition made by the Assessing Officer. 10. The learned Authorised Representative submitted that during the assessment proceedings, the assessee has furnished the quantitative tally and details of inventory. He submited that the assessee has shown gross profit rate of 67%. Therefore, only because the notices issued under section 133(6) of the Act returned unserved, purchases made cannot be disallowed. 11. The learned Departmental Representative relied upon the observations f the Departmental Authorities. 12. I have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which of the expenditures are not supported by bills and vouchers. In case, the assessee was unable to produce bills and vouchers in respect of specific expenditure, the Assessing Officer should have restricted the disallowance to such expenditure. Without doing so, the Assessing Officer cannot make any ad hoc disallowance by simply observing that the assessee was unable to produce receipts bills to substantiate the expenses claimed. Accordingly, I delete the disallowance of ₹ 10,000. 16. In ground no.4, assessee has challenged disallowance of set off of brought forward of business loss of ₹ 6,28,304 relating to assessment year 2003 04. 17. The learned Authorised Representative submitted that in the computation of income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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