ITAT Ahmedabad Deletes Alleged Bogus Purchase Addition Due to Proper Evidence Submission

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has deleted an addition of Rs 76.34 made towards the bogus purchases after observing that the assessee had provided proper documentary evidence.

The assessee, Dineshchandra Laddha, challenged the order of the Commissioner of Income Tax (Appeals), which upheld the disallowance made towards Rs 76,34,197 under section 69C of the Income Tax Act.

His case was reopened based on the information received from the investigation wing that the assessee had made bogus purchases of Rs 76,34,197 from M/s Uttam Metals. During the proceedings, the AO made additions of these alleged bogus purchases, holding that the assessee had failed to prove the genuineness of the purchases.

The assessee challenged this before the CIT(A), but the CIT(A) upheld the AO’s decision, claiming that the assessee did not provide sufficient evidence to establish the movement of goods.

However, the tribunal disagreed with the lower authorities, observing that the assessee had submitted ledger confirmations, bank statements, an affidavit from the supplier, stock registers, purchase invoices, transport documents, sale invoices, etc. These documents clearly showed the movement of goods from the supplier to the assessee.

The Tribunal also observed that the GST department had not raised any demand against the assessee for the relevant financial year.

The ITAT directed the AO to delete the addition, holding that the assessee had sufficiently proved the genuineness of the purchases.