TaxTMI 
TaxTMI 
2026 (4) TMI 1122
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....he appeal for adjudication. A.Y. 2019-20 ITA No. 1892/KOL/2025 3. The only issue raised by the Revenue in the various grounds of appeal is against the deletion of addition of Rs.12,45,885/- by the ld. CIT (A) as made by the ld. AO by applying 4% on bogus purchases/suppression of revenue/ income. 3.1. The facts in brief are that the assessee filed the return of income on 30.10.2019, declaring total income at Rs.7,62,84,690/- and book profit u/s 115JB of the Act of Rs.7,22,45,510/-. The return was processed u/s 143(1) of the on 30.04.2020. A search action u/s 132 of the Act was conducted on 30.11.2022 and on the subsequent dates on the 'Kanodia Group of cases and assessee being one of the related entity, was also covered under the said search. During the course of assessment proceedings, the ld. AO observed that assessee has made purchases of Rs.3,11,47,131/- from M/s Rajmata Dealers Pvt Ltd., which was appearing in the list of shell companies in the data maintained by the DIT (Investigation), Kolkata, and the said company is managed by the entry operator Ankit Bagri with the assistance of two dummy directors namely Shri Yogesh Kejriwal and Pravin Bhatt. The ld. AO on the....
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....vt. Ltd and had it transported to the assessee's factory premises. The assessee company had also provided the AO with copy of invoice, e-way bill and transporting documents which were also seizedduring the course of search. The assessee had also produced their books of accounts aswell as the confirmation of accounts from M/s. Rajmata Dealers Pvt. Ltd before the AO. 6.2.3 It is also noted that the statutory audit reports and the tax audit reports were prepared and issued by independent qualified auditors on the basis of thorough examination of the books of accounts and supporting evidence as furnished by the assessee company and therefore have high evidentiary value. Considering the fact that the assessee company had also filed its return of income on the basis of the same audited balance sheet and tax audit reports which have classified the impugned purchases as purchase of raw material and its application to manufacturing process without any objection. Even the AO, on examination of the details, could not find any gross irregularities in sales and other segments of the accounts so as to warrant applicability of the provision u/s 145(3) of the Act and since the sales are n....
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.... covered by the decision of the co-ordinate Bench in case of DCIT vs. Sharp Mint Ltd. [2024] 159 taxmann.com 1381 (Delhi - Trib.)[12-01-2024], wherein it has been held that so long as the sales are accepted the corresponding purchases cannot be disallowed. The operative part of the decision is as under: - "10. Upon careful consideration, we find that AO has made the addition on estimate basis. AO has himself stated that it cannot be said that assessee had not made purchases but, according to the AO, purchases were made from parties different than the parties entered in the books of account. On this account, AO has made addition for bogus purchases @ 25% of the purchases. This can only be said to be surmise. It is settled law that no addition is permissible on the basis of surmise and conjecture. When corresponding sales have been accepted, disallowance for bogus purchase is not sustainable. Further, ld. CIT (A) vide his elaborate order has dealt with all the issues raised by the AO in his assessment order and has come to the conclusion that the addition on account of bogus purchases is not sustainable. We do not find any infirmity in the well reasoned order of ld. CIT (A).....
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....ve. The assessee filed the return of income on 29.10.2023, declaring total income at Rs.16,64,81,050/-, which was processed u/s 143(1) on 10.01.2024. The ld. AO on the basis of seized material mark as 'BCPL/03' is in the form of "Despatch detail/ Advice", in which the agreed sales price per MT of TMT was recorded. The ld. AO noted that there were some discrepancies between the price recorded in this dispatch details vis a vis sales actually recorded by the assessee in the books of accounts. Accordingly, the assessee was called upon to explain the same. The assessee replied the same to be on account of placing the order and actual dispatches. However, the same was not accepted by the AO and the addition of Rs.47,93,460/ was made to the income of the assessee on account of suppression of sale by the assessee. The ld. CIT (A) in the appellate proceedings dismissed the appeal of the assessee by holding that the suppression of sales were based upon the dispatch slips found during the course of search and the addition was rightly made by the ld. AO applying 12% of Rs.3,99,45,500/- being suppressed sale thereby upholding the addition of Rs.47,93,460/-. 5.2. After hearing the rival c....
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....nd no.4 is against the appellate order sustaining the addition to the tune of Rs.20,47,140/- by the ld. CIT (A) as made by the ld. AO of Rs.1,53,00,000/- on the basis of WhatsApp Chats. 6.1. At the outset, the ld. Counsel for the assessee submitted that the addition has been made on the basis of WhatsApp Chats between Shri Rajesh Dhandaria and Patna Tiwarji, which were found in the mobile phone of Shri Rajesh Dhandaria. Similar type of chats between Shri Rajesh Dhandaria and Shri Rajeev Kanodia were found during the course of search. The ld. AO on the basis of said WhatsApp Chats estimated the cash transactions made out of books amounting to Rs.1,53,00,000/- during the impugned financial year and accordingly, the same was added to the income of the assessee. Pertinent to mention that there was no corroboration to the whatsapp chats. 6.2. In the appellate proceedings the ld. CIT (A) treated the said amount as mentioned in the WhatsApp Chats as suppressed sales and partly deleted the addition by applying the GP of 13.38%, thereby sustaining the addition to the tune of Rs.20,47,140/- and deleting the remaining amount of Rs.1,32,52,860/-.The assessee has challenged the order of l....