TaxTMI 
TaxTMI 
2025 (11) TMI 624
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.... extent as bogus purchases under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] ought to have appreciated that the disallowance of Rs. 97,57,825/- made was purely on suspicion and surmise, assumption and presumption, especially when the extent of sales reported by the appellant has been accepted under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] failed to appreciate that the disallowance of Rs. 97,57,825/- as the alleged bogus expenses is not justified when copy of the information / report of the GST Department on which reliance has been placed is not furnished to the appellant especially in the absence of any action / finding by the GST Department on the so-called alleged bogus purchases under the facts and in the circumstances of the appellant's case. 5. The learned CIT[A] is not justified in refusing to grant an opportunity to cross examine the third party, which is in gross violation of the principles of natural justice under the facts and in the circumstances of the appellant's case. 6. Without prejudice to the above, the learned CIT[A] ought to have appr....
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....ger of M/s. Gandhi Iron & Steel Co, details of payment made through banking channels. However, the AO was of the opinion that the assessee failed to satisfactorily explain the genuineness of the purchase from M/s. Gandhi Iron & Steel Co and accordingly rejected the claim of the assessee with the following observations: * The assessee could not provide any evidence in support of his claim that the CGST department has accepted the his purchase from M/s Gandhi Iron & Steel Co as genuine. * The enquiry by the CGST department regarding the bogus purchase has been accepted by the assessee, * The assessee has accepted to have claimed the purchase from M/s Gandhi Iron & Steel Co of Rs. 97,57,825/-. * The assessee had outstanding payment of Rs. 52,07,186/- towards M/s Gandhi Iron & Steel Co as on 21.08.2018, as per sworn statements of the assessee before GST department. * The assessee had already reversed the ITC in respect of of transactions for for ? which no payment is made by us to the suppliers which include this supplier M/s Gandhi Iron & Steel Co also. * The assessee failed to provide any satisfactory documents/evidence oe explana....
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....rse material to show the same as bogus. Further, ld. A.R. of the assessee also drew our attention to the observations of ld. Superintendent of Central Tax Audit Commissionerate -II, Bengaluru dated 15.3.2021 wherein the purchases from Gandhi Iron & Steel Company were held to be valid and only input tax credit availed on inward supply of goods were proposed to be disallowed as the assessee failed to pay to the supplier within the time limit of 6 months as per the financial records. Further, ld. A.R. of the assessee submitted that during the F.Y 2017-18, the assessee has made total purchases of Rs. 2,53,28,826/- from M/s. Gandhi Iron & Steel Company. However, based on mere suspicion & surmises, the ld. AO has disallowed only Rs. 97,57,825/- alleging the same as bogus. Lastly, ld. A.R. of the assessee relied upon the decision of Hon'ble High Court of Bombay in the case of Principal CIT Vs. Shapoorji Pallonji and Co. Ltd. reported in (2020) 423 ITR 220 (Bom.) & submitted that entire addition is based on the information from third party agency without conducting any independent enquiry by the AO. 8. Ld. D.R. on the other hand relied on the order of the authorities below and vehem....
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....ron & Steel Company (placed at pages 145 to 149 of the paper book), we take note of the fact that the assessee had made total purchases from M/s. Gandhi Iron & Steel Co. amounting to Rs. 2,53,28,826/- out of which the AO had alleged Rs. 97,57,825/- only as bogus. The only allegation made by the authorities below is that the assessee has claimed to have purchased goods but there is no actual movement of goods as per the report of the Commercial tax department. We are of the considered opinion that the AO had merely relied upon the information received from Commercial Tax department (GST) without carrying out any independent enquiry. We are of the considered opinion that the AO had failed to demonstrate as to how only purchases amounting to Rs. 97,57,825/- were bogus out of total purchases of Rs. 2,53,28,826/-. Further, the invoices, E-way bills, bank statement, GST return, Form GSTR-2A along with ledger copy of M/s. Gandhi Iron & Steel Company were also produced before the lower authorities which also not found to be fake and therefore, the entire addition based on the sole information from the third party agency is illegal & bad in law. The AO ought not to have made addition withou....