S. 69


CIT v Bholanath Poly Fab (P.) Ltd [2013] 40 taxmann.com 494 (Gujarat) Background: Assessee is engaged in the business of trading in finished fabrics. For the assessment year 2005-06, the Assessing Officer held that the purchases worth Rs. 40,69,546 were unexplained. Assessing Officer had issued notice to all parties from whom such purchases were allegedly made. Such notices were returned unserved by the postal authorities with the remark that the address was incomplete. He, therefore, disallowed such expenditure claimed by the assessee and computed the total income of Rs. 41,10,187. The Commissioner rejected the appeal, upon which the assessee went in further appeal before the Tribunal. The Tribunal, substantially allowed the assessee’s appeal.

If it is proved that goods are actually purchased (even though the parties are bogus), ...