2025 (8) TMI 1332

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.... as 'the Act'). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2021-22 on 17.01.2022 declaring income of Rs. 18,91,730/-. The case was selected for scrutiny under CASS for the reason that the assessee had made substantial purchases from suppliers who were either non-filers or had filed non-business Income-tax returns. The assessee is engaged in the business of trading of gold bullions, silver bullions and jewellery. In the course of assessment, the Assessing Officer had made verification in respect of purchases made by the assessee. Notices u/s 133(6) of the Act sent by the Assessing Officer was not responded by some of the suppliers. Thereafter, the matter was referred to the Designated Ve....

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....d with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was allowed. 4. Now, the Revenue is in appeal before us. The following grounds have been taken by the Revenue in this appeal: - "1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition made of Rs. 16,13,74,905/- u/s.69C of the Act without appreciating the fact that the assessee could not prove the creditworthiness, Identity and genuineness of the suppliers with whom it has carried out the transactions? 2. Whether on the facts and in the circumstances of the case and....

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.... Per contra, Shri K.M. Mehta, the Ld. AR of the assessee strongly supported the order of the Ld. CIT(A). He submitted that all the purchases were backed by proper bills and invoices and the payments were made through RTGS. He further submitted that the books of account were not rejected by the Assessing Officer before making the additions. 7. We have considered the rival submissions. It is found that the addition in this case was made on the basis of enquiry report of the DVU. While three of the parties were not found traceable at the given address, the other two parties were found engaged in labour (Mistry) and furniture related work and their turnover was not commensurate with the transactions, as disclosed by the assessee company. It is....

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....ties. This is a material aspect which has a direct bearing on the genuineness of the underlying transactions. This aspect was neither examined by the Assessing Officer nor by the Ld. CIT(A). From the stand point of commercial rationality, it was required to be examined as to how the assessee had reconciled or sustained the economic burden of ITC loss, if the transaction to the extent of Rs. 25,17,23,938/- was fictitious. 9. In view of the above facts, we deem it fit and proper to restore the matter to the file of Assessing Officer with a direction to reconcile the ITC claimed under the GST law in respect of bogus purchase of Rs. 25,17,23,938/- from the five parties which were held as non-genuine in the course of original assessment. For th....