2026 (4) TMI 774

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.... take up appeal of the assessee in ITA No.353/Del/2025 [Assessment Year 2014-15]. ITA No.353/Del/2025 [Assessment Year 2014-15] 4. Brief facts of the case are that assessee is a Private Limited company, engaged in the business of providing telecom services to Government of India for various projects. The return of income for the year under appeal was e-filed on 30.09.2014, declaring total income of INR 94,24,183/-. The case of the assessee was re-opened u/s 147 of the Act for the reason that assessee has made purchase of INR 1,43,22,000/- from M/s R D Technologies which as per the Revenue, is providing accommodation entries of bogus bills by charging commission @ 1.5% of the amount. This allegation was based on the search and seizure action carried out in the case of Shri Joginder Pal Gupta of DAG Group on 23.12.2019. Before the AO, claim of the assessee was that it had made purchases of fixed assets which were used for providing services and charged depreciation on the same, therefore, allegation of the Revenue is that purchases were made to reduce the profits was incorrect. However, the AO had not accepted the contention of the assessee and made the addition of INR 1,43,20,....

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.... 36 to 40 of PB. This further established the fact that assets under dispute was in existence where after examination insurance policy was issued by the company. All these facts lead to belief that allegation of the Revenue of accommodation entries, is not correct. In view of this discussion and facts of the case, we are of the considered opinion that AO has made an error of fact of treating the purchases of capital assets as bogus purchases of goods and made the addition thereon. Accordingly, we delete the additions so made and allowed Grounds of appeal Nos. 1 to 4 raised by the assessee. 9. In the result, appeal of the assessee is allowed. 10. Now we take up appeal of the assessee in ITA No.73/Del/2025 [Assessment Year 2016-17]. ITA No.73/Del/2025 [Assessment Year 2016-17] 11. Brief facts of the case are that the assessee has e-filed return of income on 13.10.2016, declaring loss of INR 1,41,24,341/- which was revised at same loss. The AO based on the information that assessee has purchased goods from three parties which was not genuine, had re-opened the case of the assessee by issue of notice u/s 148 of the Act on 31.03.2021. In response to the same, return of incom....

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....ies to the beneficiaries after charging commission, during the course of search conducted in Shri Joginder Pal Gupta on the DAG group. Ld. Sr. DR further submits that assessee has failed to substantiate the genuineness of the transactions of purchases made from these parties and therefore, AO has rightly treated the purchases made from them as sham transactions which orders deserves to be uphold. He prayed accordingly. 17. Heard the contentions of both the parties at length and perused the material available on record. The AO has alleged the purchases of INR 14,32,927/- made from M/s Durga Trading Company and of INR 30,73,517/- from M/s Eagle Traders are non-genuine. The assessee claimed that it had purchased various items which were used in installation of the projects awarded to it by M.P. Police Housing Corporation and by Ministry of Shipping, New Delhi. The assessee also filed the copies of work orders, installation details and completion certification issued by respective parties wherein the items supplied by these parties were utilized in the execution of project work. The necessary details so filed by the assessee before the AO are placed at pages 21 to 85 of Paper Book. ....

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.... be bogus, the purchase also cannot be held to be bogus, rather it would be a case of purchase from bogus entities/parties. That view has been upheld by the Tribunal in principal while dismissing the appeal of the Revenue. In view of the above, we are of the opinion that the questions of law proposed as (a), (b), and (c) in the appeal cannot be said to be substantial questions of law. Insofar as the question of law framed as (d) is concerned, we find that the Tribunal has not addressed the issue of adopting the gross profit rate of 5% on the alleged Hawala purchase of Rs. 2.45 crores as against the rate of 0.69% declared by the assessee, despite the fact that the CIT (Appeals) had specifically gone into that question in its order dated 18th August, 2015 and had directed the A.O. to make 5% addition in the gross profit ratio, while deleting the balance addition. We, therefore, deem it appropriate to remand the matter back to the Tribunal only to the limited extent of going into that issue. Parties to appear before the Tribunal on 05th December, 2022 and orders to be passed thereupon, preferably within a period of three months thereafter. The decision taken above in ITA No. ....

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....s. As such, the Assessee has discharged the initial burden or onus of providing the details of the parties; and it was incumbent on the Assessing Officer to rebut the evidence produced by the Assessee. We do not find anything on record controverting the findings of fact of the CIT(A) as well as the Tribunal. Despite uncontroverted findings of fact and keeping in mind that the Assessing Officer had issued 133(6) notices to the three suppliers of goods and the parties had not attended and even though the Assessing Officer did not take any further steps for investigation, in all fairness, the CIT(A) as well as the Tribunal had upheld the dis-allowance in respect of the purchases for the year under consideration to the extent of 10% of such purchases against which admittedly no appeal has been filed by the Assessee. 29. If the CIT(A) relying upon the various decisions including the decision in the case of CIT Vs. Bholenath Poly Fab (P) Ltd.(supra), has restricted the disallowance to 10% of the purchases, which decision has Nikita Gadgil 19 of 20 ITXA 781- 2018.odt not been disturbed by the Tribunal, we find that the view taken by the Tribunal is a possible view and cannot be f....