AMIT PRODUCTS, TONK,NEWAI, TONK V. RJN-W-(107)(5), TONK

ITA 1333/JPR/2024

AI Insights

The case involves Shri Amit Product, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed the additions made by the Income Tax Officer (ITO), Ward Tonk, on account of a bogus purchase transaction from M/s. Pawan Enterprises. The Tribunal examined the legality of the order under sections 147 and 144 of the Income Tax Act, 1961, and the correctness of the additions made under section 69C as unexplained expenditure. The Tribunal found that while the seller was involved in bogus accommodation entries, the assessee's books were generally accepted, and only a part of the purchases claimed as genuine needed disallowance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23939 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: MAHENDRA GARGIEYA; THRO. V.C
• Keywords: Unexplained expenditure; Bogus purchase; Accommodation entries; Bogus
• Section: 147; 148; 144; 250; 133(6); 69C; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “SMC”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 1333 (A.Y. 2013-14)/JPR/2024 Shri Amit Product, F-76, Shri Amit Product, Industrial Area, Newai, Tonk 304 021 PAN No. AAZFS 5486P ...... Appellant vs. ITO, Ward Tonk …...Respondent Appellant by : Mr. Mahendra Gargieya, Adv. (thro. V.C) & Mr. Hemang Gargieya, Adv. Ld. ARs Respondent by : Mr. Gautam Singh Choudhary, Addl. CIT, Ld. DR Date of hearing : 25/03/2025 Date of pronouncement : 25/03/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of NFAC, Delhi dated 17.09.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2013-14. The assessee has raised the following grounds of appeal: 2 1. The impugned order u/s. 147 r/w 144 of the Act dated 25.09.2021 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. Rs. 32,88,862/-: The Ld. CIT(A) has erred in law as well as in facts in confirming the additions made on account of the bogus purchase transaction made from M/s. Pawan Enterprises as unexplained expenditure u/s. 69C of the Act. The addition so made and confirmed being completely contrary to the provisions of law and facts deserves to be deleted in full. 3. The Ld. CIT (A) seriously erred in law as well as in facts of the case in confirming the invoking of S.69C of the Act which is contrary to the provision of law and facts in the present case and hence the same deserves to be quashed. Consequently, the impugned addition of Rs. 32,88,862/-deserves to be deleted in full. 4. The Ld. CIT (A) erred in law as well as in facts of the case in charging the levy of interest u/s 234A, 234B, 234C of the Act. The levy interest being charged, is contrary to the provisions of law and facts, kindly be deleted in full. 5. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 2. The brief facts of the case are that the assessee firm filed its return of income u/s. 139 of the Act on 25.09.2013, declaring total income at Rs. 1,76,980/- . Information received from the ITO, Ward 4(2), Jaipur that M/s. Pawan Enterprises was indulge in providing accommodation entries in the form of bogus purchase/sale bills against commission and no actual business was being done. Shri Pawan, Prop. Of M/s. Pawan Enterprises admitted this fact on oath before the AO, Ward 4(2), Jaipur on 14.12.2019. The copy of the VAT-8A filed by the entry provider before the Commercial Tax Deptt. also shows that purchases of Rs. 32,88,862/- were made by the assessee and VAT of Rs. 1,64,443/- was also involved in the transaction. In view of this fact, a notice u/s. 148 of the Act was issued vide dated: 21.03.2020. Ultimately, the case was assessed after making addition/disallowance of Rs. 32,88,862/- u/s. 37 of the Act. The assessee being 3 aggrieved with this order preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee and confirmed the order of the AO. The assessee being further aggrieved with this order of the Ld. CIT(A), preferred the present appeal before us. 3. We have gone through the order of the AO, order of the Ld. CIT(A) and submissions of the assessee alongwith grounds taken before us. To sum up the matter following unchallenged facts emerged for our consideration as under: A). The seller was involved in bogus accommodation entries, that he confirmed through affidavit and his affidavit was not under challenge by either side; B). In its VAT return the seller declared this transaction before the Commercial Tax Deptt. And VAT of Rs. 1,64,443/- paid by him is also on record and unchallenged by either of the party; C). The day-to-day stock register was maintained by the assessee and the same is produced before the authorities below; D). Books of the accounts were not under challenge, as the AO accepted the purchases (other than the purchase under consideration), sales, opening/closing stock and the profit declared by the assessee; E). The AO issued notices u/s. 133(6) of the Act to the broker (As the assessee claimed involvement of the broker in this transaction) and the transporter and the same were not complied with by both of them; F). The assessee claimed that no opportunity was given for cross examination of the seller party, on this issue it is observed that when parties involved are not even responding the notice issued u/s. 133(6) of the Act, how the assessee can expect cross examination of the same. It’s an attempt to weaken the case of revenue on technical issues. 4 4. Considering the above findings on fact there is no doubt that the books of the assessee were accepted by the AO, on the other hand the assessee also failed to discharge the onus of confirming the transactions with substantive evidences as discussed (supra). In view of this, as the books are not under doubt, the only method to deduce the real income is to disallow the part of the purchases claimed by the assessee as genuine. This notion was well discussed during the hearing of the matter and conveyed to both the sides as well. Resultantly, a disallowance @ 10% is confirmed out of the total disallowance of Rs. 32,88,862/-. The AO is directed to delete the balance amount of disallowance and restrict the same upto 10% of Rs. 32,88,862/-. Relevant grounds raised are partly allowed. 5. In the result the appeal of the assessee is partly allowed. Order is pronounced in the open court on the 25th Day of March 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 25/03/2025 Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड फाइल/Guard file. BY ORDER, //True Copy// (Asstt.Registrar) ITAT, Jaipur 5 Details Date Initials Designation 1 Draft dictated on PC on 25.03.2025 Sr.PS/PS 2 Draft Placed before author 25.03.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "