TaxTMI 
TaxTMI 
2025 (11) TMI 1231
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....the facts & in the circumstances of the case and in law the Hon'ble CIT(A) erred in dismissing the appellant's appeal in limine without considering the subject issues on merit by passing an ex parte order and confirming the addition made by the Id. Assessing Off icer and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax and rules made thereunder. Therefore, the appeal may kindly be restored to the Hon'ble CIT(A) for fresh adjudication. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the initiation of assessment proceeding u/s 147 of the Act merely on basis of information from investigation wing 3. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition made by the Ld AO of Rs. 10,16,906/- to the returned income by treating genuine purchases made during the normal course of business as bogus without assigning any val id reason and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 4. On the facts and in the circumstance....
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....bsp; Total 5,99,10,002 Thus reopened and completed assessment after issuing of statutory notices and passed the order u/s 143(3) r.w.s 147 of the Act thereby making addition by holding the purchases made by assessee as bogus. 3. From the records, we also noticed that during the course of assessment the assessee had complied with all the notices issued u/s 142(1) of the Act and submitted details of purchases made from the above parties i.e name of parties, address of parties, ledger account, confirmation, bank statement etc., in respect of purchases and also other details as called for by the AO. All these details have also been submitted before us in paper book which are at page 23 to 211. The AO doubted the genuineness of the purchases and treated the same as bogus by relying upon the information of investigating wing, Mumbai. 4. After having gone through the documents submitted before us, we found that assessee has discharged his initial onus in proving the identity and genuineness of the goods purchased during the year under considerations in the normal course of business activities from aforementioned parties during the respective assessment years. In respect ....
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....t has been brought to our noticed that Ld. CIT(A) in assessee's brother's case for AY 2007-08, 2008-09 and 2009-10 wherein similar additions were made on account of alleged bogus purchases from above parties have restricted the addition to 8% of the alleged bogus purchases. However, where the GP offered by the assessee's brother is above 8% in that eventuality the entire additions have been deleted. Copy of Ld. CIT(A)'s order of AY 2007-08, 2008-09 and 2009-10 in the case of assessee's brother is placed at paper book page No. 218- 276. We found that to treat the genuine purchases as bogus the AO has relied upon the statements of third party and concluded the same as accommodation entry. Since the Ld AO before making addition has not brought on record any valid/justifiable/cogent evidence to independently prove that the said purchases are ingenuine, hence under these circumstances addition made are not sustainable as has been held in the case of CIT vs Orissa Corporation Pvt. Ltd. 158 ITR 78 (SC) and the ratio laid down in Khandelwal Construction vs CIT 227 ITR 900(Guw.), wherein it has been held that the satisfaction has to be derived from the relevant facts and that....
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....ot sustainable. 9. As per the facts of the present case, the AO even did not provide any information and allegation if any, made therein, which has been used against the assessee. In these circumstances the principle of natural justice, demands that without confronting the assessee of such evidences, if any, or the information, no addition can be made. In this regard reliance is being placed on the decision of Commissioner Of Income Tax- Central V/S Sunita Dhadda Special Leave Petition (Civil) Diary No(S).9432/2018 We have noticed that AO without rebutting the evidence produced and placed on record by the assessee in respect of explained & genuine purchases, had made the additions by merely relying upon statement of third parties which is not sustainable at laws as held in the case of a) S.P. Agarwalla alias Sukhdeo Prasad Agarwalla v. ITO [1983] 140 ITR 1010 (Cal.) wherein it is held that a mere confessional statement by a third party (who is a lender of the assessee) that he was a mere name-lender and that all his transactions of loans were bogus, without naming the assessee as one who had obtained bogus loans, would not be sufficient to hold that....
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....ces. The A.O, has observed that respondent has purchased material from someone else while bogus bills were organized by these Hawala Therefore, at least to the extent even if it has been purchased from Hawala Traders the indisputable fact is that the purchases have been made and admittedly quantitative reconciliation of the stock was done by respondent of sale and purchase. The ITAT therefore accepted the explanation of respondent that only the prof it element in these accommodation entries are to be added to the income. The CIT(A) has restricted the addition by estimating the gross prof it at 12.5%. Whether that is the right estimate is a question of fact. Therefore, we see no reason to interfere". b) The Hon'ble Bombay High Court in another case titled PCIT vs. Rishabhdev Technocable Ltd in ITAT (IT) No.1330 of 2017 vide order dated 10.02.2020 (Copy of judgement enclosed hereto at page no. 281-292 of the paper book) has observed as under: On thorough consideration of the matter, we do not find any error or infirmity in the view taken by the Tribunal. The lower appellate authorities had enhanced the quantum of purchases much beyond that of the Assessing Off icer i.....
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....pect of peak balance on such purchases. Accordingly, CIT(A) concluded that issue boil down to find out the element of prof it embedded in bogus purchases which the assessee would have made. When the corresponding sales have not been doubted and the quantitative details of purchases and sales vis-à-vis stock was available, we deem it appropriate considering the entirety of facts and circumstances of the case to restrict the addition to the extent of 2% of such bogus purchase. Accordingly, the order of both the lower authorities are modif ied and AO is directed to restrict the addition to the extent of 2% on such purchases". d) Further, the Hon'ble Mumbai ITAT in the case of Geolife Organics v/s ACIT (2017) 58 ITR (Trib) 0297 (Mumbai), held as under: "12.........Assessing Off icer has not brought any material on record to conclusively establish the fact that purchases are bogus. Merely relying upon the information from the Sales Tax Department or the fact that party were not produced the Assessing Off icer could not have treated the purchases as bogus and made addition. If the Assessing Off icer had any doubt with regard to purchases made, it was incumbent upon....
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....TAT Mumbai) [ITA No. 964/Mum/2022/ am Enterprises Sr No Judgment 1. ADCIT-24 vs Indravadan H. Jain (ITAT Mumbai) [ITA No. 103/Mum/2013] 2. ACIT Circle 31(3) vs M/s VNC Infraprojects (ITAT Mumbai) [ITA No. 4537/Mum/2015] Deepali Enterprises Sr No Judgment 1. ADCIT-24 vs Indravadan H. Jain (ITAT Mumbai) [ITA No. 103/Mum/2013] Sun Enterprises Sr No Judgment 1. ADCIT-24 vs Indravadan H. Jain (ITAT Mumbai) [ITA No. 103/Mum/2013] Carbon Enterprises Sr No Judgment 1. Kaviraj Construction vs ACIT 16(3), Mumbai (ITAT Mumbai) [ITA No. 1326 - 1327/Mum/2015 2. ACIT Circle 31(3) vs M/s VNC Infraprojects (ITAT Mumbai) [ITA No. 4537/Mum/2015] Sr No Judgment 1. ITO 27(3)(1) vs Sudarshan Vithal Kote (ITAT Mumbai) [ITA No. 3917/Mum/2023] Jain Trading Corporation Sr No Judgment 1. B. R. Steel Products Pvt Ltd vs ACIT 2(1), Mumbai (ITAT Mumbai) [ITA No. 2088/Mum/2016] 2. ACIT Circle 31(3) vs M/s VNC Infraprojects (ITAT Mumbai) [ITA No. 4537/Mum/2015] Jenal Enterprises Sr No Judgment 1. ACIT Circle 31(3) vs M/s VNC Infraprojects (ITAT Mumb....