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TaxTMI 
TaxTMI 
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2026 (1) TMI 362
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.... has not furnished the complete details of suppliers such as names, addresses, PANs and amount of purchases etc. Therefore, the same were not verifiable. The ld. AO further noted that certain suppliers from whom the assessee had made purchases, there were several deficiencies/ defects in the PAN Data of the suppliers etc. Accordingly, the ld. AO analyzed the transactions of purchases and issued show cause notice to the assessee as to why the purchases made from four parties namely, Madegowda Vijayakumar prop. Of M/s Fast Deal Corporation of Rs.2,25,00,000/-, Subodh Kumar of Rs.1,94,33,085/- and Kamal Bajaj of Rs.19,28,565/- and Manokamna Enterprise of Rs.12,44,998/- aggregating to Rs.4,38,61,650/- should not be treated as non genuine and consequently treated the same as not genuine and accordingly, added to the income of the assessee in the assessment framed. 2.2. In the appellate proceedings, the ld. CIT (A) deleted the additions by observing and holding as under:- "5.2.1 The appellant has filed a consolidated reply on the above grounds of appeal. The appellant has submitted that "the AO had given 04 days time to file reply against Show Cause Notice (SCN) which is impr....
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.... Subodh Kumar & Kamal Bajaj and the same was declared by the Assessee by filing an Affidavit and submission of Purchase Register in hearing to Ld. AO. It is worthwhile to note that the assessee has not purchased goods from five parties and accordingly declared in his affidavit (ANNEXURE-2) but the department chooses to make addition of aforesaid two parties, viz Subodh Kumar and Kamal Bajaj only which shows the non-application of judicial mind." 5.2.2 The appellants claim that he has made sale to Semi-Government Department, The Gourkha Hill Council, Darjeeling) and since his sale has not been doubted thus without rejecting the books of accounts of the appellant addition on bogus purchase cannot be made. 5.2.3 During the course of assessment proceedings the appellant had submitted copy of 1. Cash Book 2. Journal 3. Bank Book 4. Ledger account for payment of commission and contract work. 5. Party e-way bill/invoice and e-way bills 6. List of suppliers etc. 5.2.4 Inspite of above confirmations addition has been made in the case of the appellant. 5.2.5 In the case of Principal Commissione....
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.... rejected and addition to be restricted to extent of profit element. 5.2.7 In this case Assessee was engaged in business of civil contractor carrying out repairs, construction, laying of drainage pipelines and other works awarded by municipal corporation An information was received that a scam was unearthed by Sales Tax Department in respect of parties who provided accommodation entries in respect of bogus purchases and it was found that assessee was also a beneficiary to such entries taken from bogus parties/hawala dealers Assessing officer also noted that parties were not produced by assessee during assessment proceedings. Thus, he held that purchases made by assessee were bogus and made addition on account of same - It was noted that purchases by assessee had not been doubted but genuineness of suppliers were doubted - Further, assessee had maintained books of account which were audited and audit report were filed under section 44AB and payment were made by account payee cheques and tax invoices were obtained - Whether, on facts. purchases could not be rejected and additions could be restricted to extent of profit element, Le., 12.5 per cent because when material was ac....
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....his appellate jurisdiction to investigate what the product was and what should have been the profit margin. Moreover, the CIT(A) and the ITAT have on facts come to a conclusion that 8% is the reasonable figure. Therefore, in our view, the judgment of N.K. Industries (supra) does not assist Ms. Gokhale's case 9. Therefore, we do not find any reason to interfere" 5.2.12 In the case of Principal Commissioner of Income-tax v. Yog Oil Traders [2023] 153 taxmann.com 386 (Bombay) the Hon'ble High Court of Bombay has held Where assessee-firm was engaged in business of importing oil in bulk, packing same in different packs and selling these packs and AO made additions on basis of statement of partner in assessee-firm wherein he admitted to bogus purchases of packing materials, since Commissioner (Appeals) in his order stated that there was no question of any purchase made by assessee to be termed as bogus as AO himself verified consumption of packing material with sales, there was no reason for Commissioner (Appeals) to conclude that 7 per cent of total purchase was to be disallowed. 5.2.13 The facts of the case are assessee-firm was engaged in business of....
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....king into account all these evidences deleted the addition. Thel d CIT (A) also relied on series of decisions while deleting the addition. Therefore, we do not find any infirmity n the same and the order of ld. CIT (A) is upheld on this issue by dismissing the ground nos. 1 and 2. 3. The issue raised in ground no.3 is against the order of ld. CIT (A) deleting the disallowances of expenses of contract and commission despite the fact that the assessee has failed to establish the expenditure being incurred wholly and exclusively for the purpose of business. 3.1. The facts in brief are that the ld. AO during the course of assessment proceedings noted that assessee has incurred expenses in respect of commission payments and contract payments which were made to related parties which included assessee's own HUF. The details whereof are given at page no.13 in Para no.3.4 of the assessment order Accordingly, the assessee was issued show cause notice for disallowance of the same which was replied by the assessee. The assessee submitted before the ld. AO that all the recipients have been filing their returns of income regularly and also furnished their ITRs, balance sheets, statement of....