AI Drafter 
TaxTMI 
TaxTMI 
2026 (1) TMI 301
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....se of Pr.CIT Vs M/s Mohammad Haji Adam & Co. in ITA No. 1004 of 2016 vide its order dated 11/02/2019 wherein it was held that G.P in the case of doubtful purchases is to be taken at the same rate of other purchases made by the assessee. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in ignoring the recent decision of Hon'ble Bombay High Court in the case of Pr.CIT Vs Kanak Impex Pvt. Ltd. wherein the Hon'ble High Court set-aside the decision of Hon'ble Tribunal and confirmed the AO decision to add back 100% of the alleged bogus purchase to the assessee's income for the corresponding assessment years. The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal, if need be. The appellant, therefore, prays that on the ground stated above, the order of the Ld. CIT (A)-51, Mumbai, may be set aside and that of the Assessing Officer restored." 3. Brief facts of the case are that the assessee was an erstwhile partnership firm is in the name and style of M/s. S Narendra Kumar and Co. (SNC) which was later converted into a private limited company M/s. Everest Product Pvt. Ltd, the asses....
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....he case of Pr. CIT vs. M/s. Mohommad Haji Adam & Co. (2019) 103 taxmann.com 459 (Bombay) where GP addition on non genuine purchases was justified. The Ld. DR relied on the order of the Ld. AO. 7. The Authorized Representative ("Ld. AR" for short) for the assessee, on the other hand, controverted the said fact and stated that the assessee has substantiated its claim by sufficient documentary evidences along with the fact that it was evident from the income tax portal screenshot that out of four parties which were identified by the Ld. AO to be non-tax filers three have filed their returns of income. The Ld. AR further contended that the assessee has duly audited its financials which were also not disputed by the Ld. AO and also stated that most of the parties have also responded to the 133(6) notice and in spite of the same the Ld. AO has failed to make any independent inquiry on these alleged companies. The Ld. AR relied on the order of the Ld. CIT(A). 8. We have heard the rival submissions and perused the materials available on record. The only issue that requires adjudication is "whether the Ld. CIT(A) has erred in deleting the addition of Rs. 25,55,69,713/- made by the Ld.....
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....s. 1,60,23,000/-. Further supporting documents in the form of Parties Ledger Account, Invoice copies with Goods Receipt Notes, E-way Bills, Transportation Receipts and Bank Statements highlighting payments have been submitted. Further the supplier has been regular in tax compliance and has filed its ITR for AY 2018-19, AY 2019-20 & AY 2020-21. It has also been submitted that input tax credit in respect of these purchases have already been allowed which proves that the supplier is regular in filing its GST returns. Copy of GST-R 2A showing the same has also been filed by the appellant. (ii) M R Gulmi - It has been submitted that the AO has taken incorrect purchase amount of Rs. 46,97,31,180/- as against actual purchase of Rs. 40,18,72,196/-. Further supporting documents in the form of Ledger Account, Invoice copies & Goods Receipt Notes, E-way Bills & Transportation Receipts, Quality Testing Reports, Cold Storage, Weighment Bridge Proof and Bank Statements highlighting payments have been filed. The appellant has also submitted Income Tax Portal screenshot confirming that M R Gulmi is not a "Specified Person" under Sections 206AB & 206CCA implying that the supplier has duly ....
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.... as non genuine. The appellant in the instant case has filed ample documentary evidence to not only support the purchase but also to justify its transportation and delivery. The factual matrix is that the expenses being disallowed are purchase of raw material which is quintessential and proportionate to the manufacturing output being shown by the appellant, wherein it is not correct to accept the manufacture and corresponding sale of the finished product but doubt the input raw material. The AO has proceeded to examine the tax behaviour of the persons from whom these purchases have been made and has made this addition since they have not been regular in filing of return of income. In my view, with respect to expenses debited in the profit & loss account that are routine business expenses such as purchase and otherwise satisfy the conditions laid down in Section 37(1) of the Act, the onus of the appellant is limited and does not extend to ensuring that the parties to whom the appellant is making these payments are tax compliant. It is also to be noted that none of these parties are admitted or identified accommodation entry providers. Further the appellant has demonstrated by way of....