TaxTMI 
TaxTMI 
2026 (9) TMI 1688
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....ure Standards. 2.1 During the course of assessment proceedings the AO made enquiry regarding the purchases made by the assessee. Upon verification the AO noted difference to the tune of Rs. 36,95,50,275/- as per the details mentioned in para no. 2.4.1 of the assessment order. In the show cause notice dated 04.03.2024 the AO proposed to disallow the above amount of Rs. 36,95,50,275/-. Upon receipt of the reply from the assessee the said difference was reduced to Rs. 1,43,82,973/- in respect of purchase from Amrapali industries Limited as per the following details: Sr. No PARTY NAME Purchases claimed by the assessee in its books of account PAN NO. Amount According to 133(6) reply Difference 1 AMRAPALI INDUSTRIES LIMITED 1153466772 AABCA8337J 1,13,90,83,799 1,43,82,973 3. Therefore, the AO reproduced the reply of the assessee wherein the assessee contended that the said difference was on account of 1 invoice (invoice no. RAJ-G194) dated 30.06.2021 of Rs. 1,39,54,951/- which has been considered twice in the show cause notice. However, the AO noted that the above submission of the assessee was not correct and stated that on cross checking the pu....
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....Therefore, the aforesaid amount of Rs. 1,43,82,973/- is disallowed u/s 37 of the Income Tax Act and added back to the income of the assessee. [Disallowance: Rs. 1,43,82,973/-] 4. Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT (A). The Ld. CIT (A) dismissed the appeal of the assessee and the relevant extracts of the order of the Ld. CIT A are reproduced as under: "SUBMISSIONS OF THE ASSESSEE 4. The assessee, through written submissions dated 12.08.2024, contended that the AO erred in disallowing purchases from M/s Amrapali Industries Limited's Rajasthan unit amounting to Rs. 1,43,82,973/-, despite submission of GST returns, GSTR-2A data, GST login credentials, invoices, ledgers, and payment proofs. It was argued that Amrapali operates two units (Agra-UP: GSTIN 09AABCA8337J1ZG and Jaipur-Rajasthan: GSTIN 08AABCA8337J1ZI), and the AO overlooked the Rajasthan sales confirmed later in the party's clarification letter dated 09.04.2024, wherein it was stated that sales from Rajasthan division were "forgot to mention" initially in response to section 133(6) notice. The assessee relied upon the Honourable ITAT Delhi in th....
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....urced goods, the claim remains unsubstantiated. The subsequent clarification letter dated 09.04.2024issued post-assessment order admits the omission as "forgot to mention," rendering it a self-serving afterthought without independent corroboration, which cannot override the contemporaneous statutory response relied upon by the AO. 7. The assessee's contention of two distinct units (Agra: GSTIN 09AABCA8337J1ZG; Rajasthan: 08AABCA8337J1ZI) is noted, but fails to explain why Amrapali's initial detailed reply (including Exhibits I-III with sales details, ledgers, and bank statements) segregated only Agra transactions, pinpointing the discrepancy. During video conference on 18.03.2024 and replies to show-cause notice dated 04.03.2024, the assessee reiterated submissions but could not reconcile the omission or produce transport documents distinguishing Rajasthan goods. Principles of natural justice were duly observed: data was confronted via SCN, opportunities granted (replies on 12.03.2024, 16.03.2024, 18.03.2024), and no sole reliance on uncorroborated statements occurred. Section 37(1) squarely disallows such unverifiable expenditures not proven wholly and exclusively....
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.... duly recorded in the Books of Accounts and in Stock Register. Purchases are duly supported by tax invoices disclosed in GST Return filed by the supplier, evident from GSTR-2A, a system generated statement of Inward Supply which is generated automatically when a supplier files its GSTR-1 (Return of Outward Supply). The Ld. AO despite having accepted the Trading result including Opening Stock, Purchases, Sales and Closing Stock, made an arbitrary addition of Rs. 1,43,82,973/-, being purchase which is already entered in the Books of Accounts of the Appellant. The action of the Ld. AO is grossly illegal, unjustified, arbitrary and erroneous. 4- The appellant craves leave to add or alter one or more ground (s) during the course of hearing of appeal." 6. At the time of hearing the Ld. AR submitted upon the facts and in overall circumstances of the case, the Ld. CIT(A) has grossly erred in confirming the addition solely on the basis of the information provided by M/s Amrapali Industries Limited in its initial response of notice under section 133(6), completely ignoring the subsequent clarification dated 09.04.2024, wherein it was clearly stated that the Rajasthan branch sales....
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....k's India Pvt. Ltd. Jaipur to the assessee showing the transportation of the gold ( 3 Kgs) which according to the assessee included the purchase of 1 Kg of gold vide bill dated 30.06.2021 subject matter of dispute in this appeal. Further the assessee referring to page no. 32 of the paper book submitted that the said purchase was recorded in the books of account of the assessee. In view of these facts the Ld. AR submitted that the addition of Rs. 1,43,82,973/- made by the AO was not sustainable and the same may be deleted. 7. On the other hand, the Sr. DR supported the orders of the authorities below. 8. We have heard both the parties and perused the material available on record. As discussed above the AO issued notice u/s 142(1) to the assessee on 12.10.2023 and 08.11.2023 to provide the details of the purchases made by the assessee during the year. The assessee provided the said details vide its reply dated 20.11.2023. However, on perusal of the details provided, the AO noted that there was a difference of Rs. 1,43,82,973/-in purchase value as submitted by the assessee (Rs 115,34,66,772/-) and as per details submitted by the party M/s Amrapali Industries Ltd. (Rs 113,90,83,7....
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....n/verification when the AO completed the assessment on 26.03.2024. In this regard, on perusal of the order of the Ld. CIT (A) we notice that this fresh evidence filed by M/s Amrapali Industries Ltd. vide letter dated 09.04.2024 was not forwarded to the AO by the Ld. CIT(A) and no remand report was called by the Ld. CIT (A) from the AO. Thus, we notice that as on date, the claim of the assessee that the sale bill vide ACK NO 172110455094344 dated 30.06.2021 amounting to Rs. 1,43,82,973/- from the Jaipur unit of M/s Amrapali industries ltd. was not considered as part of total sales by M/s Amrapali Industries Ltd. thus, resulting in no discrepancy in the purchase amount as per the assessee and the AO remains unverified by the AO as the AO did not get an opportunity to examine the same at the time of assessment proceedings or by way of remand proceedings called by the Ld. CIT (A). In this regard, we take note of the observation of the Ld. CIT (A) that the clarification issued by M/s Amrapali Industries Ltd. vide letter dated 09.04.2024 mentioning the omission as "forgot to mention" as a self-serving afterthought without independent corroboration is to be rejected. However, we note that....