The assessee had made purchases from M/s. HJM Fuels Pvt. Ltd., ...

Legitimate purchases wrongly treated as bogus; evidence disregarded by tax dept.

Case Laws     Income Tax

September 3, 2024

The assessee had made purchases from M/s. HJM Fuels Pvt. Ltd., which the Department treated as bogus and added a profit element. The assessee pointed out discrepancies in the incriminating material found from the accommodation entry provider, M/s. HJM Fuels Pvt. Ltd., during the survey. The assessee filed a detailed reply, providing evidence of the genuineness of the transactions, including copies of purchase bills, VAT returns, Form No. 26AS, and quantitative tally of purchases and sales. The Director of M/s. HJM Fuels Pvt. Ltd. submitted an affidavit admitting to the transactions with the assessee, which the Assessing Officer acknowledged. However, the Assessing Officer relied on the incriminating material without providing reasons for disregarding the assessee's evidence. The Tribunal held that the incriminating material lacked credibility and evidentiary value, and the Department failed to controvert the assessee's contentions. Consequently, the addition of the profit element on the purchases was not sustainable, and the assessee's appeal was allowed.

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