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May 2024

Bogus purchases — red flagged by the Sales Tax Department — No disallowance warranted without bringing on record any other evidence to prove that the purchases made by assessee were not genuine.

By Ajay R. Singh, Advocate
Reading Time 2 mins

4 Principal Commissioner of Income Tax-2 vs. SRS Pharmaceuticals Pvt Ltd

ITXA No. 1198 of 2018

Dated: 3rd April, 2024 (Bom.) (HC).

Bogus purchases — red flagged by the Sales Tax Department — No disallowance warranted without bringing on record any other evidence to prove that the purchases made by assessee were not genuine.

The Department Appeal pertained to alleged bogus purchases from suppliers, who were red flagged by the Sales Tax Department. The Assessing Officer (AO) had passed the assessment order by disallowing the cost of purchases made, relying only upon the information supplied by the Sales Tax Department / Investigation Wing of the Income Tax Department without bringing on record any other evidence to prove that the purchases made by assessee were not genuine.

The CIT(A), on an appeal filed by assessee had given a categorical finding of fact that purchases made by assessee could not be doubted. Revenue challenged this order of the CIT(A). The Appellate Tribun

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