AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 484
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....s Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"] arising out of assessment framed for the assessment year 2018- 19 under section 147 read with section 144B of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] vide order dated 23.03.2024. Facts of the Case 2. The assessee is an individual engaged in the business of wholesale trading of chemicals such as Soda Ash, Soda Ash Dense, Sodium Tripolyphosphate and various industrial materials under the proprietorship concern Shri Shiv Shakti Enterprise. he assessee filed the return of income for A.Y. 2018-19 on 30.07.2018 declaring total income of Rs. 25,67,760/-. The Assessing Officer received information through the Insight Portal under CRU alleging that the assesse....
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....ee engineered bogus purchases merely to inflate expenses and reduce taxable profit. The entire purchases of Rs. 1,75,16,480/- were treated as unexplained expenditure under section 69C and taxed under section 115BBE. The assessment was completed under section 147 read with section 144B determining total income at Rs. 2,00,84,240/- 4. The assessee challenged the reassessment and the entire disallowance before the CIT(A). The assessee contended that reopening under section 147 was bad in law. The assessee also contended that the purchases from M/s. S. K. Enterprises were genuine as complete documentary evidences were filed. It was also submitted that no adverse material was confronted or cross-examination provided to the assessee. The asses....
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....cts in confirming the disallowance of genuine purchase made by the Appellant from M/s. S.K. Enterprise for a sum of Rs. 1,75,16,480/- and treating them as unexplained expenditure u/s. 69C of the Act. It is submitted that the addition as confirmed by the learned CIT(Appeals) deserves to be deleted and the same may please be deleted. (ii) The learned CIT (Appeals) failed to appreciate that the Appellant had led the evidences for the purchase as well as the sale relating to such purchases by producing relevant quantity records like inward register, outward register and tally of quantity of stock as well as other contemporaneous records before him justifying that the purchases are genuine. The learned CIT(Appeals) failed to consider th....
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....ves the right to add, alter or amend any of the grounds of appeal. 8. The learned Authorised Representative (AR) reiterated submissions made before the lower authorities and emphasised that books of accounts are audited, stock tally and inward-outward movement records exist, payments were made through banking channels, corresponding sales were accepted by the Assessing Officer, there was no rejection of books under section 145, without purchases there could be no sales and entire disallowance leads to unrealistic and excessive taxation. The learned AR submitted that though the assessee maintains that purchases are genuine, without prejudice, the disallowance, if sustained, may be reasonably restricted to profit element embedded in purcha....
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....ssessee, material available on record, and rival contentions. 13. The core dispute relates to absence of transportation evidences, weighbridge slips, PAN of transporters and inconclusive inquiries conducted by DVU. These circumstances raise doubt about physical delivery of goods; however, the existence of corresponding accepted sales indicates that the assessee indeed traded in goods. 14. In such circumstances, settled judicial principle is that entire purchases cannot be disallowed. Only profit embedded in such disputed purchases can be brought to tax to neutralize possible inflation of expenditure and prevention of revenue leakage. 15. The Coordinate Benches of the Tribunal have consistently held that even where suppliers are non....