TaxTMI 
TaxTMI 
2026 (7) TMI 620
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.... National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'Ld. CIT(A)'] of even dated 22/12/2025 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for the Assessment Years (AY) 2018-19 to 2020-21 respectively. Since common facts and issues are involved in all the captioned appeals and cross objections, hence, the same were heard together and are being disposed of by this common order. Revenue's appeal ITA No.468/Ahd/2026 is taken as the lead case for the purpose of narration of facts. ITA No.468/Ahd/2026 & C.O. No. 16/Ahd/2026 : 2. The brief facts of the case are that the assessee is an individual engaged in the business of civil construction and infrastructure projects. For the assess....
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....ransactions created to inflate expenditure and reduce taxable profits. Consequently, the Assessing Officer treated the entire purchase amount of Rs. 54,75,907/- as unexplained expenditure under section 69C of the Act and brought the same to tax as per the provisions of section 115BBE of the Act, completing the assessment at a total income of Rs. 3,79,28,377/- vide order dated 22.03.2023. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A). During the appellate proceedings, the assessee submitted detailed written submissions and contended that the purchases were completely genuine, actual, and utilized in various state government infrastructure projects. The assessee fu....
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....icting the disallowance on proven bogus purchases to Rs. 1,91,656/- being 3.5% of bogus purchases of Rs. 54,75,907/-, by merely estimating profit thereon, despite the purchases being sham accommodation entries routed through bogus concerns of Shri Bhaveshkumar Bhogilal Patel, Prop. M/s India Steel Impex, and in view of the decision of the Hon'ble Bombay High Court in Kanak Impex (India) Ltd., as affirmed by the Hon'ble Supreme Court?" (ii) The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal." 4.1. On the other hand, the assessee has filed the following corresponding Cross Objections contesting the legal validity of the reopening of the assessment as we....
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....e the identity of the parties and the genuineness of the purchases. He has also invited our attention to the relevant pages of the paper book to demonstrate that the seller had duly deducted the TDS on all the sales made to the assessee, which heavily substantiates the authenticity of the transactions. The Ld. AR has submitted that since the identity of the seller and genuineness of the purchases was duly substantiated with documentary evidence, such as, copy of audit reports and financial statements of the assessee, copy of purchase bills, bank statements, copy of ledger account of M/s. India Steel Impex in the books of the assessee, copy of confirmation letter from Shri Bhavesh Bhogilal Patel- proprietor of M/s. India Steel Impex, copy of....
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....xecution of the GIDC infrastructure projects, the reflection of transactions in the audited accounts of the supplier along with the payment of GST, the subsequent confirmation by the supplier resiling from his earlier uncorroborated statement, and the severe prejudice caused to the assessee by the denial of the opportunity of cross-examination. While appreciating these glaring facts alongside the documentary evidences placed on record, the Ld. CIT(A) has categorically held that a 100% disallowance is legally unsustainable. He in this respect has gone on the footing that the primary purpose of making any disallowance in such cases of unverified or alleged accommodation purchases is to bring to tax the extra profit element or the savings in t....
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....gged on the insight portal that the assessee had made certain bogus purchases and the said information was further based upon the statement of the proprietor of M/s. India Steel Impex admitting that he was involved in providing accommodation entries, therefore, the Ld.AO taking cognizance of the said information, show caused the assessee as to why the assessment be not reopened in the case of the assessee. The AO, thereafter, duly followed the procedure as prescribed u/s 148A of the Act. The Ld. Counsel for the assessee could not bring out any default on the part of the AO in this respect. Therefore, the Ld. CIT(A) rightly decided this legal issue against the assessee. During the course of arguments before us, the Ld. Counsel for the assess....