TaxTMI 
TaxTMI 
2026 (3) TMI 776
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....prove the genuineness of transactions and creditworthiness of the creditors with respect to the amounts allegedly standing in the assessee's account. 2. Whether in the facts and circumstances of the case, the CIT(A) has erred in law in directing the AO to delete the addition of Rs. 33872852/- made by the AO on account of unproved purchases, subject to verification of the PAN, assessment status of the suppliers from the concerned AOs, ignoring that the same were unproved purchases which are liable to be added in the income as the assessee had failed to prove the genuineness of transactions and even notices sent to the suppliers u/s 133(6) of the IT Act, 1961 were returned back unserved. 3. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 2,05,85,086/- made by the AO without appreciating the fact that addition was made on account of inflated purchases where notices sent to the suppliers were returned back unserved despite which the AO had made a very reasonable addition of mere 10% of total purchases. 4. Whether in the facts and circumstances of the case, the CIT(A) has erred in law in admitting th....
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....se purchases of Rs. 3,38,72,852/- are not treated as genuine. Accordingly, they are being added to the income of the assessee as non genuine purchases." 3.1 The Assessing Officer also made the addition of Rs. 2,06,85,086/- of 10% of the purchases in the total income of the assessee towards inflated purchases as the assessee has not filed the confirmations by disallowing towards purchases. 4. Aggrieved the order of the AO the assessee preferred the appeal before the Ld. CIT(A) who deleted the additions of Rs. 17,47,803/- and Rs. 2,06,85,086/- on merits. However while deleting the addition of Rs. 3,38,72,852/- on account of purchases made from M/s Mohit Trading Co & M/s Surana Brothers on the basis of the evidence filed by the assessee the Ld. CIT(A) has observed as under:- "3.5 The facts of the case have been considered. The only ground taken by the AO, both during the assessment and the remand proceedings is that the enquiry letters issued to the two parties had been returned unserved and/or the assessee could not produce the said party before the CIT(A). It is clarified that though reference had been made in the assessment order to certain field enquiries, in the le....
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....o amounts representing purchases made on credit. Reference is also made to the decision of the honourable Supreme Court in the case of Orissa Corporation P Ltd (151 ITR 78) wherein it was held that where an assessee has given the names and addresses of creditors and it was also in the knowledge of the revenue that they were income tax assessees, the onus lies on the revenue to pursue enquiries in such creditors. Mere issue of enquiry letters by the AO is not sufficient in such cases. Reference is made to the decision of the Supreme Court in the case of Lalchand Bhagat Ambica Ram (37 ITR 288), it was held that when a court of fact arrive at its decision by considering material which is irrelevant to the enquiry or acts on material, partly irrelevant and partly irrelevant and it is impossible to say what extent the mind of the court was affected by irrelevant material used by AO in arriving at its decision, a question of law arises, whether the finding of the court is not vitiated by reason of its having relied upon conjectures, surmises and suspicions not supported by any evidence on record or partly upon evidence and partly upon in admissible material. On no account whatever should....
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.... come on record that the said party has not filed the return of income. The tribunal was swayed away by the contention of the respondent -assessee, but lost sight of the fact that the Revenue has also raised the issue of addition of Rs. 3,38,72,852/- to be non -genuine purchases. In view of the aforesaid facts and circumstances of the case, the impugned judgment and order dated 13-04-2017 passed in income Tax appeal No. 3895/Del/2013 by the Income Tax Appellate Tribunal Delhi Bench 'E' New Delhi cannot be sustained and it is set aside to the extent. The appeal succeeds and is allowed. The matter is remanded back to the Tribunal concerned to re-hear the matter afresh and decide the appeal on merits. The question of law is answered in favour of the Revenue and against the respondent-assessee." 5. The Ld. Sr. DR submitted that the proper opportunity was given to the assessee to prove the entity of the parties. She also submitted that the AO was found that at both address given by the assessee no such companies were existed. The both companies has not filed the return of income, which also create the doubt regarding the existence of the companies. The both....
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....he A.Y.2009-10. The total purchases amount from the both parties cannot be included in the taxable income but profit on purchases be included in the taxable income. Considering the facts and circumstances of the case we, deem it fit and proper to restrict the profit @5% estimated gross profit on alleged purchases amounting to Rs. 3,38,72,852/-. 7. In the result, the Revenue appeal is partly allowed. ITA NO. 2187/Del/2017 8. Assessee filed this appeal against the Ld. CIT(A) order dated 8.3.2017. The assessing officer passed the giving effect of the order dated 28-03-2013 of the Ld. CIT(A) and in the compliance of the Hon'ble High Court order passed in writ Tax No. 163 of 2014 dated 13-03-2014 and relief allowed of Rs. 2,24,32,889/- to the assessee. Aggrieved the order of the AO the assessee preferred the appeal before the Ld. CIT(A), who dismissed the appeal. The Ld. CIT(A) observed in his order as under: Thus it is evident from the caption that the said assessment order has been passed in consequence to the direction of the Ld. CIT(A), Meerut. In this regard, it is pertinent to note that u/s 246 there is no section providing for adjudication by CIT(A) of an order ....