TaxTMI 
TaxTMI 
2026 (2) TMI 979
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the addition of Rs. 88,16,120/- ignoring the fact that the onus is on the assessee to prove the genuineness of any income/expenditure incurred by it. 3. Because on the facts and circumstances of the case and in law, the Ed. CIT(A) has erred in deleting the addition of Rs. 88,16,120/- ignoring the fact that assessee failed to establish the genuineness of income/expenditure by way of cogent evidence. 4. Because on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 6,893 ignoring the fact that assessee Incurred an expenditure of Rs. 6893/ in the nature of interest/penalty on payment of TDS. 5. Because on the facts and circumstances of the case and in aw, the Ld. CIT(A) has erred in deleting the addition of Rs. 6.893/ ignoring the fact that expenditure of Rs. 6893/ in the nature of interest/penalty on payment of TDS is not in the nature of business or profession." 2. The facts of the case are that the assessee is an individual engaged in the business of trading of Gold, Silver and Bullion in the name and style of M/s Shri Ganesh Bullions and Jewellers. It filed a return of income on 7.03.2022 on a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sub section 1 of section 37. Accordingly, the assessee was assessed at the total income of Rs. 1,11,20,530/-. 3. Aggrieved with the said order, the assessee went in appeal before the ld. CIT(A), NFAC. Before the ld. CIT(A), it was submitted that the assessee was a proprietorship firm engaged in the business of Gold, Bullion and Gold ornaments. Its accounts were audited under section 44AB of the Income Tax Act. During the entire financial year, the assessee had not done a single sale / purchase in cash. All the sale purchases were either through banking channels or through sale / purchase adjustment. Furthermore, it was submitted that 7 of the 8 parties from whom purchases had made had confirmed the said purchases. Only M/s A.M. Ornaments, from whom the assessee had purchased goods of Rs. 4,40,80,599/-, had not replied. The addition had been made by treating the said purchase as bogus only because the party had not replied. It was submitted that non-compliance of notice did not make the expenditure disallowable. The goods purchased from the said party were trading goods which had been purchased and thereafter sold. The said party was registered on the GST Portal, filed GST retur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the ld. CIT(A) had not passed a reasoned and speaking order refuting the issues raised by the ld. AO in his assessment. He pointed out that the said party namely Mohammad Ashraf Mandal had not filed any reply to the notice sent by the ld. AO. Furthermore, on a verification from the Insight portal of the Department, it had been found that the above party was a non-filer. This created doubt with regard to the purchases made from the said party as any party that was making sales of Rs. 4,40,80,599/- could not be a party that would not be required to file a return. The assessee had been given an opportunity to produce a confirmation from the said party but had failed to do so. Since, the assessee had failed to substantiate the purchase with cogent evidence, the ld. CIT(A) was not justified in deleting the addition, and that too without recording any reasons for deleting the same. He accordingly prayed that the ld. AO having established the bogus nature of the purchase, the addition made by him should be confirmed. 5. On the other hand, Sh. Rakesh Garg, Advocate (hereinafter referred to as the ld. AR) drew our attention to the paper book filed by him on 23.08.2025 which contained ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hesh K. Shah He, therefore, prayed that the order of the ld. CIT(A) deserved to be upheld on this account. With regard to the disallowance of TDS, the ld. AR drew our attention to the submission placed before the ld. CIT(A) and the decision of the Hon'ble Supreme Court in the case of Lachmandas Mathura vs. CIT reported in 254 ITR 799, wherein the Hon'ble Supreme Court had held that interest on arrears of tax was compensatory in nature and not penal. Hence, the ld. AR submitted that no disallowance was called for under Explanation 1 to sub section 1 of section 37 on this account. He further submitted that all these facts had been placed before the ld. CIT(A) and it was only after consideration of all these facts that the ld. CIT(A) had passed his order. The assessee could not dictate how speaking an order should be, but it was clear that all the materials have been placed before the ld. CIT(A) and been duly considered before coming to the conclusion that no addition was warranted. Accordingly, the ld. AR prayed that the order of the ld. CIT(A) deserves to be upheld. 6. We have duly considered the facts and circumstances of the case. Once the Trader is registered with the GST a....