2022 (1) TMI 738

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....learned Income Tax Appellate Tribunal, New Delhi, Delhi Bench 'C' (hereinafter referred to as the 'ITAT') in ITA No. 3982/DEL/2015 dismissing the appeal of the Revenue against the order dated 25.032015 passed by the Commissioner of Income Tax (Appeals) [hereinafter referred to as the 'CIT(A)']. 2. It is the case of the appellant that a search and seizure operation under Section 132 of the Income Tax Act, 1961 (in short, the 'Act') was carried out in the case of the respondent-assessee along with other companies which were controlled by the respondent's Directors on 12.12.2006. On the basis of the said search and seizure operation conducted, the respondent-assessee's case was selected for scrutiny and a notice under Section 143(2) of the ....

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....n dismissed by the impugned order observing as under: "6. We find that the AO has disallowed the purchases made from the four parties namely, M/s Meet Enterprises, M/s Suman Enterprises, M/s Durga Enterprises and M/s Bharat Trading. Primarily, we find that the AO has relied on the information collected by the Investigation Wing and no opportunity to cross examine the parties has been afforded which is a violation of principles of natural justice. The assessee has provided copies of purchase bills, weightage bills and architect certificates. The AO has not reasoned that the bills or the certificate of the architects are bogus and wrong on facts. 7. As per accounting standards AS-7, the purchases and working progress have to....

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....ssessee. The non-purchase of material/non-utilization of the amounts for purchase of material by the suppliers would be an appropriate evidence to disallow this purchases but the same has been wanting. Reliance is placed on the judgment of Hon'ble jurisdictional High Court in the case of CIT Vs Rajesh Kumar 172 taxmann.com 74 wherein it was held that failure to follow principles of natural justice vitiate the proceedings. Reliance is placed on the order of the Hon'ble High Court of Bombay in the case of CIT Vs. Nikunj Eximp Pvt. Ltd. 2013 TIOL 04 where it was held that no addition is warranted based on the fact that the suppliers have not appeared before the AO. 8. Hence, keeping in view the entire facts and circumstances of th....