AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 698
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....age (72 years) and his resignation was intimated to Registrar of Companies in prescribed Form No. DIR-12 on 29-04-2025 copy also enclosed for ready reference. But the Ld. CIT(A) passed the impugned order on 10-06-2025 which was not noticed by the appellant company. When the Tax Auditor gone through the Income Tax portal, he came to know about the appellate order passed by Ld. CIT(A), NFAC then after the same was downloaded and present appeal was filed on 27-11-2025 with a delay of 88 days. The delay was neither wilfull and nor wanton but due to the above genuine reason and therefore requested to condone the delay and relied upon Hon'ble Gujarat High Court judgement in the case of Vareli Textile Industries -Vs.- CIT 284 ITR 238. We are satisfied with the reasons stated in the affidavit, thus the delay of 88 days in filing the above appeal is hereby condoned. 3. Brief facts of the case is that the assessee is Private Limited Company engaged in the business of manufacturing and trading of pharmaceutical products. Assessee filed its Return of Income for the Asst. Year 2019-20 on 14-10-2019 declaring total income at Rs. Nil after set off Brought Forward Losses of earlier years. The a....
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....ed reply as follows: "First of all we would like to draw your kid attention that our case is selected for scrutiny may be considering the escaped income more than Rs. 50,00,000/- for the year under review. Your goodself had issued show cause notice for proposed variation for Rs. 56,75.210/- on account of purchase, computed at the rate of 13.85% of Rs. 4,09,76,267/-, In this connection we would like to state and clarify that total transaction of Purchase made from M/s. Gensis Health Care comes to Rs. 4,09,76,267/- as per invoices issued by the party which includes IGST (@18% amounting to Rs. 62,50,617/ which is not a part of purchase and not debited to purchase a/c in our audited books of account. We have debited Rs. 3,47,25,650/- to Purchase a/c and Rs. 62,50,617/- in ITC IGST 18% considering GST Liability to be paid during the year under review as Input Tax Credit. (Copy of Bill wise statement of purchase with bifurcation of Purchase & GST attached along with copy of Ledger a/c of ITC IGST @ 18% from our audited books of accounts are attached herewith vide Annexure-1. Considering the above facts, according to us the total variation comes to Rs. 48,09,503....
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....of supporting documentary proof of physical movement of goods. The fact that sales were made by the appellant or goods were manufactured does not establish that the raw materials were actually sourced from the tainted supplier. There is no direct correlation established between the specific purchases from M/s Genesis Health Care and any particular batch of production or sales. The appellant's reliance on the judgment of the Hon'ble Gujarat High Court in CIT v. M.K. Brothers is misplaced, as in that case the suppliers were untraceable but not found to be bogus or engaged in providing accommodation entries 5.6.3. In the present case, the disallowance is supported by specific findings based on investigation and not merely triggered by Risk Management Strategy alerts. When the seller is conclusively found to be an accommodation entry provider and the transaction is not proved by credible and independent evidence, the claim of purchase cannot be accepted as genuine merely on the basis of entries in the books or procedural compliance under GST. The burden of proving the genuineness of the transaction lies on the assessee and in this case, the appellant has failed to disc....
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....mber of each transaction. Thus the A.O. without making any verification made the addition based on the Investigation wing report. Whereas the assessee having declared the above transactions in its Return of Income and the present addition made by the A.O. will amounts to double taxation that too without rejection of books u/s. 145(3) of the Act. Thus requested to quash the assessment and delete the addition made by the A.O. 7. Per contra, Ld. Sr. D.R. Shri Abhijit appearing for the Revenue supported the order passed by the Lower Authorities and produced copy of the Cancellation of Registration Certificate of M/s. Gensis Health Care from the GST portal stating that with effect from 01- 06-2019. Thus Ld. D.R. claimed the transaction are bogus in nature, the additions made by the A.O. are liable to be sustained. 8. We have given our thoughtful considerations and perused the materials available on record including Paper Book filed by the assessee. The reassessment in the present case has been initiated on the basis of information received from the Investigation Wing alleging that the assessee had obtained accommodation entries in the form of bogus purchases amounting to Rs. 4,09,....