TaxTMI 
TaxTMI 
2026 (1) TMI 1120
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....ffidavit for condonation of delay, duly sworn by the Director of the assessee company, explaining the reasons for the said delay. On perusal of the affidavit, it is stated that the delay occurred on account of the assessee seeking appropriate legal advice and, more importantly, due to the serious ill health of the son of the Director, who was undergoing continuous medical treatment and therapy sessions from 07.02.2025 onwards, which substantially impeded the assessee's ability to file the appeal within the prescribed period. It is further affirmed that the delay was neither wilful nor deliberate, that the assessee has not derived any benefit from the delayed filing, and that grave prejudice would be caused if the delay is not condoned. 3. Having considered the explanation furnished in the affidavit and keeping in view the settled legal position that substantial justice should prevail over technical considerations, we are satisfied that the assessee has demonstrated reasonable cause for the delay in filing the appeal. The explanation appears to be bona fide and supported by sworn averments, and there is no material on record to suggest any mala fide intent or negligence. The lear....
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....nsactions were genuine and held that mere payment through account payee cheques and production of purchase invoices and transport documents do not establish the genuineness of purchases, particularly in view of the categorical admission made by the Director in his statement under section 131. 6. Relying upon judicial precedents, including CIT v. Prashant (P) Ltd. [1994] 121 CTR (Cal) 20 and N.K. Industries Ltd. v. DCIT [2016] 72 taxmann.com 289, the Assessing Officer concluded that the purchases were bogus in nature and that the entire amount debited towards such purchases was liable to be disallowed. Accordingly, the Assessing Officer passed the reassessment order, determining the total income of the assessee at Rs. 10,23,91,060/- after making an addition of Rs. 10,22,92,928/- under section 69C of the Act. Penalty proceedings under section 271AAC were also initiated separately. 7. Aggrieved by the reassessment order, the assessee carried the matter in appeal before the CIT(A).The CIT(A) considered the grounds of appeal, the written submissions filed by the assessee and the assessment order. The CIT(A) upheld the reopening of assessment under section 147, holding that the inf....
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....duly supported by third party evidences, the addition made by the AO without objectively and subjectively disproving the evidences so filed, and solely on the basis of statements recorded and information shared by officers other than the Assessing Officer, makes the addition grossly illegal and liable to be deleted as per law and in the interest of justice. 4. On the facts and circumstances of the case and in law the entire purchases made by the Appellant are genuine and which deserve to be accepted as such. 5. On the facts and circumstances of the case and in law, the books of accounts having been accepted as well as the sales made by the Appellant, the corresponding purchases also ought to have been accepted as per law and in the interest of justice. 6. Without prejudice, in case any purchases made by the Appellant are held to be non-genuine, then the addition deserves to be restricted only to the gross profit on the same as per law and in the interest of justice. 7. The Appellant craves leave to add, amend, alter, vary and / or withdraw the above grounds of appeal with the kind permission of the Hon'ble Tribunal. 9. The learned Authorized R....
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....g the transactions with M/s Indo Count Industries Limited and copies of GST Form 2A for the relevant months. It was submitted that these evidences further corroborate the genuineness of the transactions and establish that the purchases were duly accounted for and subjected to indirect tax compliances. 13. Without prejudice to the aforesaid submissions, the learned AR submitted that even assuming, though not admitting, that the purchases made by the assessee from M/s Indo Count Industries Limited are held to be non-genuine, the addition cannot be sustained for the entire purchase amount. It was contended that, in such a situation, the addition, if any, ought to be restricted only to the gross profit element embedded in such purchases, as the corresponding sales have been accepted and the books of account have not been rejected. It was submitted that restricting the addition to the gross profit would meet the ends of justice and would be in consonance with the settled legal position. 14. The learned DR relied upon the orders of the Assessing Officer and the CIT(A) and submitted that the lower authorities have correctly appreciated the facts and the law while confirming the addi....
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....for treating the purchases as bogus is the statement of the Director of the assessee company, recorded under section 131 of the Act by another authority. Except for placing reliance on the said statement, no independent enquiry has been conducted by the Assessing Officer to disprove the documentary evidence furnished by the assessee. There is also no material brought on record to establish that the payments made by the assessee had returned to it in any manner, either in cash or otherwise. 18. The contention of the learned AR that the statement of the Director has been misread and misunderstood merits serious consideration. When the statement is read in its entirety, it merely indicates that the goods were sold in transit, without physical delivery being taken by the assessee. Such a practice, as contended by the learned AR, is a recognised commercial practice in the textile trade, and by itself cannot be equated with an admission of bogus or sham transactions. Importantly, the statement does not contain any admission of receipt of cash, accommodation entries, or circular movement of funds. 19. We further note that the assessee had also filed additional evidences before the l....
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....the Hon'ble High Court, namely that where the assessee fails to prove the genuineness of purchases and the source of expenditure, the provisions of section 69C mandate disallowance of the entire amount, is binding. 23. However, it is equally well settled that the application of a binding precedent is contingent upon the existence of the foundational facts on which such precedent rests. A judgment cannot be mechanically applied divorced from its factual matrix. The Hon'ble Supreme Court has repeatedly held that a decision is an authority for what it actually decides and not for what may logically follow therefrom. 24. In Kanak Impex, the Hon'ble High Court upheld full disallowance under section 69C on the basis of specific and corroborative incriminating material, including: i. investigation by the Sales Tax Department establishing VAT fraud, ii. findings that the assessee was actively involved in obtaining bogus bills, iii. material showing that the alleged suppliers were hawala operators, and iv. circumstances demonstrating that the purchases were entirely fictitious accommodation entries. The existence of such material formed the juris....