TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 297
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....vey amounting to Rs. 46,43,534/-. ii. Purchase made from parties who were unresponsive to notices issued u/s.133(6) of the Act Rs. 98,90,725/-. iii. Parties whose PAN number and correct addresses were not furnished by the assessee Rs. 8,76,48,306/-. Besides addition of unsecured loans amounting to Rs. 1,21,50,000/- was also made finding them to be not genuine. Thus, against income returned by the assessee of Rs. 2,92,83,044/-, the AO made addition on account of the aforesaid totaling to Rs. 11,43,32,295/-. 3. The assessee carried the matter in the appeal before the Ld. CIT(A) who deleted part of the addition confirming the remaining. Aggrieved by the same, both the assessee and the Revenue have come up in appeal before us raising the following grounds: Grounds in ITA No.690/Ahd/2024 (Revenue's Appeal) "1. whether on the facts and in the circumstances of the case and in line, the La. CIT(A) was justified in deleting the addition made of Rs. 90,08,334/- of bogus purchases without appreciating the facts of the case. 2. Whether on the facts and in the circumstances of the case and in law. the Ld. CIT(A) was justified in deleting the addition....
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....ers of the authorities below, is that the AO noted the assessee to have admitted in the course of statement recorded u/s.133A of the Act that 25% of amounts from some sundry creditors was not genuine and 100% in relation to one sundry creditor was non-genuine, totaling in all to Rs. 46,43,534/-. The said parties are listed at page 4 of the assessment order as under: Sr. No. Name of the party Expense incurred during the year (in Rs. ) Percentage of disallowance Amount 1 . Ambaben Laljibhai Chaudhary 51,74,136 /- 25 % 12,93,534 /- 2 . Godadbhai M. Chaudhary HUF 25,00,000 /- 25 % 6,25,000 /- 3 . Laljibhai G. Chaudhary HUF 25,00,000 /- 25 % 6,25,000 /- 4 . Gayatri V. Sathvara 21,00,000 /- 100 % 21, 00, 000 /- Total 46,43,534 /- 7. During assessment proceedings, the assessee, however, stated that it had disclosed all the amounts so surrendered under IDS Scheme and had paid taxes also with respect to the parties listed at S.no 1-3 above, with respect to Gayatri V Sathvara, 100% of which allegedly was stated to be non-genuine by the assessee in his statement, the assessee subm....
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....d in the statement made during survey it did not mean the transaction for the impugned year was also bogus. He contended that the AO had not brought anything else on record except the statement recorded during survey. Reliance was placed on the decisions of the ITAT in the case of Income Tax Officer vs. Toms Enterprises (2019) 103 taxmann.com 289 (Cochin) & Mahesh Ohri vs ACIT (2013) 35 taxmann.com 301 (Delhi) for the proposition that no addition could be made solely on the basis of statement recorded dehors any corroborative evidence. He further pointed out that the assessee had furnished PAN and ITR of the said creditor and had also demonstrated the said creditor to have declared impugned income in her return of income. 11. The Ld. DR, however, relied on the findings of the Ld. CIT(A) that in the earlier years also this creditor had admittedly been stated to be bogus and the assessee had offered 25% of expenses claimed on account of said creditor in the IDS Scheme and he further pointed out that the Ld. CIT(A) had recorded the fact that no documentary evidences were produced by the assessee proving that the expenditure relating to this party was fully correct. 12. We have h....
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.... since we have noted from the assessment order that it was the assessee who was responsible for postponing and dragging the assessment proceedings to the fag end of the limitation period by not complying with notices issued initially by the AO. The AO has categorically noted that the assessee did not comply with any notice issued to it right up to November of 2019. The assessee in fact started responding only when show cause notice was issued on 11-11-2019, submitting part details on 15-11-2019.Thereafter two more notices were issued in the month of December on 03-12-2019 and 07-12-2019, to which reply was filed submitting evidences. The assessment was getting time barred on 31-12-2019. Thus it is clear that the assessee started participating in the assessment proceedings barely a month and a half before it was getting time barred, filed reply and evidences piecemeal on the issues raised by the AO in his show cause notice, giving no time to the AO to verify the same. The reply in relation to the genuineness of transaction with Ambaben Laljibhai Chaudhary was filed by the assessee on 10-12-2019 in response to notice dated 07-12-2019 and on considering the reply when the AO asked the....
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....tal transaction of the assessee with three parties to whom notices issued remained unserved amounted to Rs. 1,15,03,539/- and that of the remaining 13 parties amounted to Rs. 2,80,59,358/-. The order of the AO reveals that the three parties in whose case notices were returned were: i. Shri Bhuvneshwari Constc. Co. ii. Global Transport iii. Padmshree Corporation The 13 parties who did not respond to the notices issued u/s. 133 (6) of the Act are listed at page 8 of the assessment order as under: Sr No. Name of the sundry creditors Amount paid/ claimed during the year under consideration 1 Pramukh Trader 1035020 2 Krishna S Thakkar 606000 3 Jam Global Trade 574000 4 Jay Kanhaiya Stone Industries 2360280 5 Jay Bhagwati Quarry Works 922271 6 Ratnamani Industries 11795308 7 M/ s Gayatri Stone Industries 2178301 8 Aggregate engineering in Corporation 428886 9 Kaveri Corporation 1474166 10 R D Patel 1731007 11 Sai Enterprise 177839 12 Nilkanth Poly Works 1560736 13 Gokul Stone Industries 3215544 Total 2,80,59,358 20.....
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....ave gone through the order of the Ld. CIT(A) and we have noted that he has appreciated evidences filed by the assessee vide its letter dated 26.12.2019 and deleted most of the disallowance made by the AO. The evidences so filed, as noted by the Ld.CIT(A) at para 6.3 & 6.4 of his order are PAN of the said parties, contra confirmation ledger account, copies of bills raised and ledger account of succeeding year showing payment made to the parties through banking channels. He noted no adverse comments to have been made by the AO on the same and also that the AO did not give sufficient time to the assessee to furnish evidences, issuing its show cause notice at the fag end of the year on 24.12.2019 giving very little time to respond the same also. 24. We find that this finding of the Ld. CIT(A) is grossly unjustified. As noted above in our order at para 21 the Ld.CIT(A)completely ignored the entire chronology of events which happened during assessment proceedings, recorded in the assessment order, wherein the AO has categorically noted that the assessee did not comply with any notice issued to it right up to November of 2019. The assessee in fact responded to only the last few notices....
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....ince the AO in his show cause notice had proposed disallowance @ 25% of purchases relating to these parties, he could not have made disallowance of 100%. Further, he noted the assessee to have furnished sufficient evidences to the AO vide its letter dated 26.12.2019 to establish the genuineness of all these parties except four parties which are noted in Para 7.5 of his order. Accordingly, he restricted the disallowance made by the AO to the extent of Rs. 25,72,721/- being 25% of the purchase transaction made by the assessee from the said four parties which amounted to Rs. 1,02,90,882/-. 30. On this issue also, we have noted that the Ld. CIT(A) has appreciated evidences filed by the assessee to the AO vide its letter dated 26.12.2019. We have held in our order above while dealing with the issue of disallowance of purchase of Rs. 90,08,354/- at para 25, that this act of the Ld. CIT(A) was completely unfair considering that all these evidences were furnished at the fag end of the assessment proceedings entirely on account of fault of the assessee alone who had not participated at all the entire assessment proceedings except at the fag end. Therefore, following the reasoning mention....