TaxTMI 
TaxTMI 
2026 (9) TMI 1561
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of revenue. 2. The revenue has proposed the following substantial questions of law:- i. Whether the Hon'ble ITAT was justified in law in deleting the addition of Rs. 12,73,85,064/- made under section 69C read with section 115BBE of the Act, despite the assessee's failure to discharge the primary onus of proving the genuineness of purchase, when suppliers were found to be non-existent, untraceable, had denied transactions during departmental verification? ii. Whether the Hon'ble ITAT erred in holding that rejection of books of account under section 145(3) is a precondition for invoking section 69C, when the statute does not mandate such rejection for making additions on account of unexplained expenditure? iii.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spite the respondent/assessee's failure to discharge the primary onus of proving the genuineness of the purchases, when suppliers were found to be non-existent, untraceable and had denied transactions during departmental verification. 5. It is also argued that the Appellate Tribunal committed an error in ignoring adverse material on record, including verification reports of the department, cancelled/suspended GST registrations of suppliers and absence of stock register/transportation evidence and thereby wrongly deleted the addition solely on the ground that sales were accepted. It is also argued that the Appellate Tribunal has erred in holding that rejection of books of account under Section 145(3) is precondition for invoking 69C when ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of all the cases to whom notices were issued under Section 133(6) of the said Act. 10. Finally, the Assessing Officer came to the conclusion that the transactions made by the respondent/assessee for purchases were all sham transactions and the assessment of the respondent/assessee was completed by the Assessing Officer vide order dated 29th December, 2022 at Rs. 12,89,98,924/- after making the total addition of Rs. 12,73,85,064/- under Section 69C read with Section 115BBE of the said Act on account of bogus or un-explained purchases. 11. While passing the said order, the Assessing Officer did not accept the reply given by the respondent/assessee. While passing the said order, the Assessing Officer recorded that respondent/assessee had....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t/assessee had duly furnished books of account, purchase invoices, payment details through baking challans and other supporting evidence. The Appellate Tribunal has also correctly observed that the Assessing Officer had passed the order of addition solely on the non-response of the suppliers to the notice issued under Section 133(6) of the said Act and alleged cancellation of GST registrations. The Appellate Tribunal has correctly recorded that these things were beyond the control of the respondent/assessee. 16. In furtherance thereto, the Appellate Tribunal has also recorded after considering all the documents that once the sales have been accepted the corresponding purchases cannot be disbelieved. 17. In furtherance thereto, the App....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Commissioner of Income Tax vs. Nitin Ramdeoji Lohia [2022] 145 taxmann.com 546 (Bombay) has specifically held if the purchases are bogus, it would be impossible for the assessee to complete the business transaction and that if the purchase is bogus, the corresponding sale also must be bogus or else the transaction would be impossible to complete and as a necessary corollary, unless the corresponding sale is held to be bogus, the purchase also cannot be held to be bogus, rather it would be a case of purchase from bogus entities/parties. The ratio of the said judgment squarely applies in the instant case. Here, the sales are not doubted after examining the books of account and accordingly the question of disbelieving the purchase does not and....