AMARENDRA SINGH,KOLKATA V. ITO, WARD 34(1), KOLKATA

ITA 1939/KOL/2025

AI Insights

The case involves Amarendra Singh, the appellant, who contested the orders of the Income Tax Department regarding alleged bogus purchases amounting to Rs. 36,14,061 for the assessment years 2014-15 and 2016-17. The purchases were initially deemed bogus based on a survey and subsequent reassessment under Sections 147 and 148 of the Income Tax Act, 1961. The Tribunal examined the materials and arguments presented, including the impact of a fire incident that destroyed physical records, and found that the purchases were recorded in the books and payments were made through bank transactions. The Tribunal's decision was influenced by precedents and the lack of substantial evidence to prove the purchases were not genuine.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846775 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: 2014-2015
• Appeal Filed On: 25-08-2025
• Other Referred Cases: PCIT Vs. Ganesh Steel And Alloys Limited, Siksha 'O' Anusandhan Vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAS MONDAL
• Assessee Lawyers: MIRAJ D SHAH
• Keywords: Condonation of delay; Set aside; Additional evidence; Question of law; Bogus purchase; Third party statement; Competent authority; Opportunity of cross examination; Bogus
• Section: 147; 148; 142(1); 68; 133(6); 69C; 133A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA Nos. 1939 & 1940/KOL/2025 Assessment Years : 2014-2015 & 2016-17 Amarendra Singh, 5th Floor, Room No. C-561, Bagree Market, 71, B.R. Basu Road,, Bagree Market, Kolkata - 700001 [PAN: AXZPS1242C] Vs. ITO, Ward 34(1), Kolkata, Aayakar Bhawan Poorva, 110 Shantipally, E.M. Bypass, Kolkata - 700107 APPELLANT RESPONDENT Assessee by : Miraj D Shah, AR Revenue by : Manas Mondal, Sr. DR Date of hearing : 12.03.2026 Date of Pronouncement : 25.03.2026 O R D E R These appeals filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC). Delhi, [hereinafter referred to as “the Ld. CIT(A)] dated 14.08.2025, DIN & order No. ITBA/NFAC/S/250/2025- 26/1079641178(1) (for AY 2016-17) and ITBA/NFAC/S/250/2025- 26/1079640593(1) (for AY 2014-15): Since the above appeals are heard together and the issues are common, these are being disposed of, for the sake of convenience I am taking first to the ITA No. 1940/KOL/2025. The decision will apply mutatis mutandis in other appeal too. Printed from counselvise.com 2 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh ITA No. 1940/Kol/2025 The assessee has raised the grounds of appeal in ITA No. 1940/Kol/2025 “1. For that the Learned CIT(A) erred in law and on facts in dismissing the appeal ex parte. Such dismissal is unjustified, unwarranted, and deserves to be set aside. 2) For that in the facts and circumstances of the case, the addition of ₹36,14,061 made on account of alleged purchase is wholly erroneous, unjustified, and liable to be deleted. 3) For that the reasons recorded for reopening do not satisfy the settled judicial principles governing Section 147 of the Act, and accordingly, both the reopening as well as the consequent assessment order are bad in law and deserve to be quashed. 4) For that the notice issued under Section 148 of the Act, as well as the approval obtained for reopening, are invalid, bad in law, and without jurisdiction, rendering the entire proceedings and the consequent assessment order void ab initio. 5) For the approval us 151 of the Act is bad in law and hence the approval, the reopening notices and consequent assessment order void ab initio. 6) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax Appeals erred in upholding that the material based on which the Ld Assessment Officer passed the assessment order are collected behind the back of the assessee and which were not provided during the course of assessment proceeding, thus material should be excluded/ignored for the purpose of this case. 7) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax Appeals erred in upholding that the statement of third parties on which the Ld Assessment officer relied during the course of assessment proceeding were not subjected to cross examination for the assessee, thus the third party statement relied upon should be excluded/ignored for the purpose of this case. 8) For that the notice and/or the orders issued in the present case were without jurisdiction and hence the Ld CIT(A) erred in confirming the same. Therefore, the same is bad in law and deserves to be deleted. 9) For that the facts and circumstances of the case the notice(s) issued during the assessment proceedings was without jurisdiction and bad in law and hence the entire assessment order is bad in law and the same should be quashed. 10) The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. Printed from counselvise.com 3 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh 11) The appellant craves leave to press new, additional grounds of appeal or modify withdraw any of the above grounds at the time of hearing of the appeal.” 2. Briefly stated the facts of the case are that the assessee filed return of income on 14.10.2016 declaring total income of Rs. 8,63,930/-. Later on, as per information received by from the ADIT (Inv.), Unit-4(1), Kolkata, vide letter No. ADIT (Inv.)/Unit-4(1)/Krishna Enterp/Kol/2018- 19/195 dated 23.07.2018 for AY 2016-17. A survey operation u/s 133A of the Act was conducted on 12.01.2018 in the case of M/s Krishan Enterprises at 7, Ganpat Bagla Road, Block-C, Flat No. 513, 5th Floor, Kolkata – 700007. Shri Manoj Kumar Rameka stated in the statement recorded that bogus bill of purchase has been provided by him to Shri Sanjeev Kumar Behani by the use of Shri Shyam Trading, Naba Durga Trading Company, Riddhi Siddhi Enterprises and Bhagwati Traders, the said bogus bills provider Shri Manoj Kumar Rameka has given statement. The details and bogus bills taken by the assessee namely Kanninath Engineering Corporation is for Rs. 36,14,061/- are FY 2015- 16 relevant to AY 2016-17. Consequently, the case was reopened after obtaining approval from the competent authority. Accordingly, notice u/s 148 of the Act was issued on 29.03.2021 which was duly served to the assessee. Subsequently, further notice u/s 142(1) of the Act dated 10.01.2022 was issued to the assessee for asking raised details. In response to the notice assessee furnished submission which were perused the submissions filed by the assessee was considered and the AO concluded that there was no physical delivery of the goods and it was Printed from counselvise.com 4 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh remained unproved and further the assessee was unable to provide any corroborative evidence which can substantiate that the purchases were not bogus and purchase and physical delivery of goods was made. He further observed that as per submission dated 11.02.2022 it was stated that the assessee would provide copy of VAT return shortly but till date there was no submission of the VAT return. Accordingly, the AO held that the purchase made of Rs. 36,14,061/- remains unexplained and were treated as bogus purchase. Accordingly, the AO made addition u/s 68 of the Act and completed the assessment on 16.03.2022. 3. Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) issued various notices on different dates but there was no compliance. Accordingly, he dismissed the appeal of the assessee on the basis of material available before him. 4. Aggrieved from above the order, the assessee filed appeal before the ITAT. The Ld. Counsel reiterated the submissions made before the AO and referred to the submissions made on 19.01.2022 and 15.02.2022 which is as under: “5. The assessee furnished his reply online on 19.01.2022 and submitted that- “(i) We are doing business in trading of Iron and iron materials. We have bought materials from M/s Riddhi Siddhi Enterprises of 159 Sarani, 7th Floor, Kolkata 700007 having VAT No-19272028095 during the period from 01.04.2015 to 31.03.2016 amounting to Rs. 36,14,061/- and the full amount was paid in the same year itself. We have taken credit of VAT paid on above purchase in our VAT returns also. (ii) We have office situated at 71, BRB, basu road Bagri Market, C-561 Kolkata 700001 which had a major fire accident in the month of September 2018 wherein everything was burnt in almost all 500+ offices and shops. However we have Printed from counselvise.com 5 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh taken ledgers and copy of invoices from the soft copies maintained and backup kept. Hence we are unable to provide copy of VAT return presently and applying for the same in VAT department and will submit soon. (iii) Copy of computation of income for the year under consideration is attached herewith. (iv) Soft copy of invoices received from supplier is attached alongwith copy of bank statement and Ledger of the party from our books of accounts in support of the transactions. (v) We have made all transactions and sold the same to our parties also and all transactions are supported by bank transactions and physical delivery of materials. We hereby inform you that our transactions are not Bogus transactions......... 6 The submission of the assessee as well as attached documents were carefully examined and further notice u/s 142(1) dated 10.02.2022 was issued seeking details as under- i) A Copy of FIR made by you filed with local police station in case of fire to your office. ii) Documentary evidence/newspaper cutting clearly indicating loss to your office by fire. iii) Insurance claim sought from Insurance company by you and the response from the Insurance company. iv) A report from fire department clearly mentioning the incident of fire to your office. v) A copy of VAT return for F.Y. 2015-16. vi) You have claimed in your reply that physical delivery of material has undertaken. In this regard, you are required to furnish the corroborating evidence (apart from e-invoices and copy of ledger) proving physical delivery of material vii) It may be noted that you have not furnished the complete communication details of M/s. Bhagwati Traders with whom trading activities have undertaken, you are required to furnish correct communication details including email id and contact no. of M/s. Bhagwati Traders 7 In response to the same, the assessee has submitted vide his reply on 15.02.2022 that- \"We hereby furnish following information as required by you 1. A copy of FIR filed by Fire Department against the owners of the building is attached herewith. This was the news of almost all newspapers for atleast a week. 2. A copy of new letter by Times of India is attached herewith. 3. We have not sought any insurance claim since office was not insured. 4. Fire department FIR copy as attached as per point no. 1.5. We have applied to VAT department for reset of password and not yet received the same. A copy of application is attached. We will submit the same as soon as we get the password. 6. As we have already mentioned Printed from counselvise.com 6 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh documents are not available due to fire incident, we are unable to provide any evidence of physical delivery. 7. Ridhi Sidhi Enterprise address is already mentioned in their bill copy and we have attached the same in our reply earlier. Their communication address is 159 Rabindra Sarani, 7th Floor, Kolkata - 700 007. VAT Tin no. is 19272028095. We are not dealing with the party since last 5-6 years and are not in contact with them. However, we hereby share name and mobile no. of person with whose reference we did transaction with Mis Ridhi Sidhi Enterprise. Mr. Mahavir Prasad Mittal, 54 Munshi Sadruddin Lane, Kolkata-700 007. Mob NO. 9331050711. The assessee has also attached paper cutting of Times of India regarding fire incident at Bagri Market Kolkata on 16 September 2018 and a copy of FIR filed by DFO against 3 persons namely Radha Bagree, Varun Raj Bagree and Krishna Kumar Kothari. A copy of application addressed to Sales Tax Officer seeking/resetting of assessee's ID and password of the VAT portal.” 5. He further relied on the judgment of jurisdictional High Court in the case of PCIT Vs. Ganesh Steel And Alloys Limited 2025(7) TMI 1510, (Calcutta High Court), dated 22.07.2025. 6. On the other hand, the Ld. DR relied on the order of lower authorities and submitted that the case of the assessee was reopened u/s 147/148 of the Act on the basis of survey carried out and statement recorded in which it was accepted that the other parties were not in bogus transactions and the assessee was one of the beneficiary who has received bill but actual physical delivery of the goods could not be substantiated. 7. Considering the rival submissions, at the outset of hearing, I observed that the appeal filed by the assessee before the Ld. CIT(A) on 11.04.2022 against the reassessment order passed by the AO. The Ld. CIT(A) issued various notices but there was no compliance from the assessee side. Therefore, the order passed by the Ld. CIT(A) is exparte order on the basis of material available before him. Since, in this case, Printed from counselvise.com 7 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh the AO has brought out the entire facts of the case and there is no need for further discovery of facts. Therefore, relying on the judgment of Hon’ble Odisha High Court in the case of Siksha “O” Anusandhan Vs. CIT reported in 363 ITR 112 in which it has been held as under: “liability is well settled once the material available on record, the appeal court should have disposed of the case on merits taking those materials in consideration and there is no need to direct remand.” 8. Considering the above judgment, I am taking up the case for adjudication. Here the dispute raised by the revenue, there was bogus purchase made by the assessee on the basis of survey statement recorded u/s 133A of the Act. Further, the assessee had recorded ethe entire transactions in his books of accounts and payments were made through banking channels. Undoubtedly, when the purchase are made the stock gets entry in the books of accounts, stock gets increase and the assessee has recorded the purchase in books of accounts and accordingly the stock got increased. The AO has never doubted on the books maintained by the assessee and he has accepted the financial statement prepared by the assessee on the basis of books of accounts. However, in this case, the AO has made addition u/s 68 of the Act if the addition made u/s 68 of the Act. It is presumed that the transactions had been happened there should not be any doubt that there was no transaction is carried out and payments have also been made by the assessee which has not been denied by the AO. Therefore, relied on the Printed from counselvise.com 8 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh judgment of jurisdictional High Court as relied by the Ld. Counsel noted (supra) in which it has been held as under: “We have heard Mr. Tilak Mitra, learned Advocate assisted by Mr. Amit Sharma, leamed standing Counsel appearing for the appellant/revenue and Mr. Pratyush Jhunjhunwala, learned Advocate appearing for the respondent/assessee There is a delay of 69 days in filling the appeal. As the delay has been properly explained and the same being not inordinate we are persuaded to exercise our discretion in the matter and condone the delay in fling this appeal. Accordingly, the application for condonation of delay being IA No: GA/1/2025 is allowed The appellant/revenue is aggrieved by the impugned order passed by the learned Tribunal by which the order passed by the CIT(A)-NFAC, Delhi dated 24.8.2023 was set aside. The assessee filed the return of income on 28.9.2012 declaring the total Income of rupees Nil. The return was processed under Section 143(1) and thereafter the case was reopened under Section 147 of the Act on the ground of bogus billing in the guise of purchases to the tune of Rs.3875,000 from M/s Chardhar Industries. The assessee responded to the notice issued under Section 148 of the Act and flied their return of income. The re assessment proceedings were concluded by order dated November 27, 2019 making an addition under Section 8C of the Act on account of bogus expenditure to the tune of Rs.47,03,192/ The appeal filed by the assessee before the Commissioner of Income Tax (Appeals), (CIT(A)] was dismissed. The assessee carried the appeal before the learned Tribunal. The learned Tribunal has first taken up the issue as to whether the reopening of the assessment was legally valid. In this appeal we are not required to go into this aspect since the substantial questions of law which have been raised by the revenue only pertain to the addition under Section 69C of the Act. The learned Tribunal in the impugned order has held that the provision of Section 69C will not be attracted as the assessee has duly disclosed the total purchases in their books of accounts and the payments made to M/s. Chakradhari Industries were also from and out of the books of accounts with explained sources and, therefore, the source of expenditure was also found. That apart, the source of expenditure was also fully explained and, therefore, the addition made by the Assessing Officer under section 69C of the Act cannot be sustained. Section 69C of the Act states that where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the 52 [Assessing) Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case made be, may be deemed to be the income of the assessee for such financial year. It is evidently clear that the said section 69C would stand attracted if the source of expenditure is not satisfactorily explained by the assessee before the Assessing Officer and only then it will be deemed to be income of the assessee. The Assessing Officer alleged the purchases to be bogus However, the Assessing Officer did not dispute the source of expenditure to be not genuine. The assessee also took a stand that the purchases made from the said Industries were genuine purchases of raw materials which were further Printed from counselvise.com 9 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh consumed in the production of finished goods and the assessee is assessed under the Act for several years and they have been added under section 44AB of the Act and on perusal of which it is clear that the assessee maintains purchase register and stock register as It is a manufacturing concern. The specific stand of the assessee was that the goods purchased had been used for manufacturing of finished goods and this aspect was not disputed by the Assessing Officer. Furthermore, the assessee was able to prove that the goods purchased is sold and the sale price is duly received and recorded in the books and, therefore, the irresistible conclusion would be that the purchase is automatically proved. Furthermore, the assessee demonstrated by producing Annexure VII to the TAR which shows the quantitative details of the principal items of raw materials and finished goods and on comparing the gross profit as well as the notional profit ratio, it can be observed that the same is in line with the earlier years. Furthermore, the assessee was able to prove the purchases by producing the stock register which shows that the purchase is on a day to day basis and the production of the finished goods was supported by RG-23A and RG-23C register regularly maintained which has been verified by the Auditor and is also available in Annexure IV of the TAR. Therefore, the assessee was fully justified in contending that the sales are accepted, purchase cannot be treated as bogus. The CIT(A) was of the view that the notices issued under section 133(6) of the Act to the other party remained non- complied and the inspector deputed from the department for verification has reported that the said party is not found. Admittedly, this fact was never brought to the notice of the assessee and the assessee came to know of it only from the assessment order. That apart, the transaction was done about seven years back and the address given by the other party was about seven years back and there is every possibility that the party may change their address. These factual details were never disputed by the Assessing Officer. Therefore, we are of the view that the learned Tribunal was right in holding that section 690 would not stand admitted in the facts of the case. Thus, we find no question of law much less substantial questions of law arises for cotton this appeal. Accordingly, the appeal falls and the same is dismissed. Consequently, the stay petition (GA/7/2015) to stands dismissed.” Respectfully following the above judgment, I allow the appeal of the assessee. ITA No. 1939/Kol/2025 9. Since the facts and issues involved in these appeals are identical, except difference in figures or calculations, therefore, my findings/decision given above in ITA No. 1940/Kol/2025 will, mutatis Printed from counselvise.com 10 ITA Nos. 1939 & 1940/KOL/2025 Amarendra Singh mutandis, apply to ITA No.1939/Kol/2025 as well and consequently the appeals are allowed. 10. In the result, both the appeals of the assessee are allowed. Order pronounced on 25.03.2026. Sd/- (Laxmi Prasad Sahu) Accountant Member Dated: 25.03.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "