Appeal limited to 12.5% of purchases under Income Tax Act. Upheld assessing officer's actions. Confirmation crucial.

The ITAT partly allowed the appeal, limiting the disallowance to 12.5% of the bogus purchases under section 69C of the Income Tax Act. The assessing officer's actions were upheld due to credible information about accommodation entry providers and non-existent suppliers. The appellant failed to provide confirmation from the parties involved, leading to the decision that purchases from non-existent parties could not be considered genuine. The ITAT emphasized the necessity of the assessing officer's actions in this context, citing relevant court decisions to support the outcome.

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Issues:
1. Ex-parte order u/s. 144 by CIT(A)
2. Addition of Rs. 28,47,360 as bogus purchases under section 69C
3. Credibility of information, non-existent suppliers, and genuineness of purchases

Issue 1: Ex-parte order u/s. 144 by CIT(A)
The appellant challenged the ex-parte order passed by the CIT(A) under section 144, contending that proper opportunity was not provided. The appellant argued that the reasons for the ex-parte order were incorrect and contrary to the Income Tax Act and rules. However, the ITAT found that the assessing officer had credible information about accommodation entry providers and bogus suppliers being used to obtain false bills, leading to the reopening of the assessment. The appellant failed to provide any confirmation from the parties involved, and the assessing officer's actions were deemed necessary in this context.

Issue 2: Addition of Rs. 28,47,360 as bogus purchases under section 69C
The assessing officer made an addition of Rs. 28,47,360 to the returned income, considering certain purchases as bogus under section 69C of the Income Tax Act. The appellant contested this addition, claiming the purchases were genuine. However, the ITAT noted that notices sent to the concerned parties were returned unserved, indicating the non-existence of these suppliers. The Sales Tax Department's inquiry also revealed these parties providing bogus accommodation entries, further supporting the assessing officer's decision to treat the purchases as bogus.

Issue 3: Credibility of information, non-existent suppliers, and genuineness of purchases
The ITAT emphasized that the appellant had obtained bogus purchase bills from non-existent parties, as evidenced by the failure to produce any confirmation or relevant parties during the proceedings. The assessing officer's actions were deemed justified based on the overwhelming evidence of the suppliers' non-existence. The ITAT cited relevant court decisions to support the conclusion that the purchases from such non-existent parties could not be considered genuine. However, considering that the sales were not doubted, a 12.5% disallowance out of the bogus purchases was deemed appropriate to meet the ends of justice, as supported by previous court judgments.

In conclusion, the ITAT partly allowed the appeal, limiting the disallowance to 12.5% of the bogus purchases, based on the specific circumstances and legal precedents cited during the proceedings.

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