TaxTMI 
TaxTMI 
2026 (6) TMI 494
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.... solely on third-party information from the Sales Tax Department without any independent verification. The learned CIT(A) further erred in not considering the documentary evidence furnished by the Appellant, including invoices, bank statements, stock registers, and delivery challans, which substantiate the genuineness of the purchases. ii. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in treating the purchases as bogus merely because the alleged suppliers could not be traced or did not appear in response to notices issued u/s 133(6). The Appellant had no control over their whereabouts and had furnished ample documentary evidence. Hence, mere non-appearance cannot justify disallowance, and the addition is arbitrary and contrary to law. iii. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in relying upon judgments such as N.K. Proteins Ltd. and CIT vs. La Medica, which are factually distinguishable. In those cases, incriminating material and fraudulent practices were found, which are entirely absent in the present case. Hence, the reliance on such cases is therefore misplaced, and theref....
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....urchases, consumptions and closing stock of each raw material and production of each of the finished goods. iv. Name, address, TIN and PAN of each party from whom purchases are made. v. Details of corresponding sales made. vi. Copies of purchases bills. vii. Copy of stock register. viii. Copies of bank statements. 3.2. Ld. AO in para 5 acknowledged the attendance of the authorized representative of the assessee and furnishing of details and documents as called for. He further records in para 6.1 about the fact of submissions made by the assessee which includes copies of invoices, copies of receipts, ledger account, copies of bank statement, copies of sales invoices, copies of stock register, copies of delivery challans in respect of purchases made from the alleged three parties. He issued notice under section 133(6) to the three parties on the addresses provided by the assessee which were returned back as un-served. Assessee was asked to produce these parties for verification but could not produce the same. Ld. AO show caused the assessee for holding the said purchase as non-genuine for which it furnished reply stating that these part....
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....tions raised by her. 5.1. In respect of the documentary evidences placed on record, details of which is already listed above, it is strongly contended that no deficiency has been pointed out by the authorities below to disprove the same. Assessee has furnished quantitative details as well as bank statement to establish the movement of goods and payment be made through proper banking channel. Most importantly, both the ld. AO and ld. CIT(A) very categorically observed that no evidences of transportation, delivery challans or proof of actual physical movement of goods has been furnished for which ld. Counsel for the assessee referred to para 6.1 of the impugned assessment order wherein ld. AO himself has taken note of submission of the assessee which includes copies of delivery challans in respect of purchases made from the alleged hawal dealers. Thus, according to her, such a bald allegation is contrary to the factual observations made in para 6.1 by the ld. AO himself. 5.2. Details in respect of GP ratio and NP ratio for preceding and subsequent two assessment years is also furnished which is extracted below for ready reference to demonstrate the profitability of the assessee....
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.... the assessee have not been rejected by the ld. AO nor the sales made by the assessee have been doubted. We also find that no discrepancies have been pointed out in the corroborative documentary evidences placed on record by the assessee so as to disprove them. 7.1. In respect of reliance placed by the ld. AO on the information of Maharashtra Sales Tax Department on the enquiries undertaken by them, there is nothing on record from where it can be inferred as to what enquiries were undertaken so as to provide an opportunity of cross verification/examination before taking an adverse view for the assessee. 7.2. Reliance placed by the ld. Sr. DR on the decision of Drisha Impex (supra) is distinguishable as assessee failed to prove the genuineness of purchases by expressing its inability to furnish purchase confirmation and other details of the suppliers because of which additions were made. In the present case before us, ld. AO himself has acknowledged about furnishing of all the details by the assessee as called for by him. 7.3. Further, we take note of the decision of Hon'ble jurisdictional High Court of Bombay in the case of PCIT v. Kanak Impex (India) Ltd. (2025) 172 taxma....
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....assessee filed all necessary documents in support of the returns on which the ledger accounts were prepared, including confirmation of the supplies by the suppliers, purchase bills, delivery bank statements etc, to justify the genuineness of the purchases, however, such documents were doubted by the AO on the basis of general information received by the AO from the Sales Tax Department. In our opinion, to wholly reject these documents merely on a general information received from the Sales Tax Department, would not be a proper approach on the part of the AO, in the absence of strong documentary evidence, including a statement of the Sales Tax Department that qua the actual purchases as undertaken by the assessee from such suppliers the transactions are bogus. Such information, if available, was required to be supplied to the assessee to invite the response on the same and thereafter take an appropriate decision. Unless such specific information was available on record, it is difficult to accept that the AO was correct in his approach to question such purchases, on such general information as may be available from the Sales Tax Department, in making the impugned additions. This for ....