CHANDRA KUMAR JAIN,DAMOH V. INCOME TAX OFFICER, DAMOH

ITA 70/JAB/2024

AI Insights

The case involves Chandra Kumar Jain, the proprietor of M/s Chandra & Sons, who appealed against the order of the CIT(A), NFAC, which dismissed his appeal against the ITO, Ward, Damoh's order. The primary contention in the appeal was the addition of certain amounts to the assessee's income, which were claimed to be based on third-party statements and unsupported by direct evidence or proper cross-verification. The assessee argued that these additions were against the principles of natural justice and law, referencing several precedents including the Supreme Court's decision in C. Vasantlal & Co. v. CIT. The CIT(A)'s decision was challenged on multiple grounds including the erroneous confirmation of additions based on assumptions and the failure to consider the actual ownership of the bills in question. The assessee's decision to withdraw the appeal was influenced by his participation in the Direct Taxes Vivad Se Vishwas Scheme, 2024, which aims to resolve tax disputes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361240 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2011-2012
• Other Referred Cases: C. Vasantlal & Co. v. CIT [1962] 45 ITR 206, N.K. Industries Ltd., Kishin chand Chellaram Vs CIT (1980) 125 ITD 713(SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK BHURA
• Assessee Lawyers: DHIRAJ GHAI
• Keywords: Bogus purchase; Principle of natural justice; Bogus
• Section: 147; 69

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (By Virtual Mode) BEFORE SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.70/JAB/2024 A.Y. 2011-12 Chandra Kumar Jain, Prop. M/s Chandra & Sons, 14, 121 Kirana Merchant, Bakoli Kirana Line, Damoh, M.P. vs. NFAC, Delhi, (Jurisdiction Officer, ITO, Damoh, M.P. PAN:ACJPJ7460N (Appellant) (Respondent) Assessee by: Sh. Dhiraj Ghai, FCA Revenue by: Sh. Alok Bhura, Sr. DR Date of hearing: 19.05.2025 Date of pronouncement: 21.05.2025 O R D E R PER NIKHIL CHOUDHARY, A.M. This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC dated 29.12.2023 under section 250 of the Income Tax Act, 1961 dismissing the appeal of the assessee against the order of the ITO, Ward, Damoh dated 12.12.2018. The grounds of appeal are as under:- “1. On the facts & circumstances of the case, Ld. CIT(A) erred in confirming the order of Ld. AO being based on third party's statements without allowing their cross verification and hence addition made are against law AND natural justice as has been held in the case of C. Vasantlal & Co. v. CIT [1962] 45 ITR 206 by Supreme Court. Hence additions of Rs 4,65,700/-and Rs 10,525,/- may kindly be deleted. 2. On the facts & circumstances of the case, LD CIT (A) erred in confirming the additions made by AO of Rs. 4,76,225/-without considering the fact that bill issued by M/s Narmada Sugar Pvt Ltd Narsinghpur.as considered to be that of assessee was not in assessee name and hence addition was based on mere assumptions and presumptions. ITA No.70/JAB/2024 A.Y. 2011-12 Chandra Kumar Jain 2 3. On the facts & circumstances of the case& law, Ld CIT (A) erred in confirming the addition of Rs. 4,76,225/- under section 69 towards 100% bogus purchase instead of restricting to profit element as held by Hon'ble Supreme Court in decision of N.Κ. Industries Ltd. 4. On the facts & circumstances of the case, Ld. CIT(A) erred in not considering the fact that re-opening of the assessment proceedings u/s 147 was based on third party information & in mechanical mode & hence assessment order is bad in law & needs to be quashed. The assessment order was bad in law for other reasons too. 5. On the facts & circumstances of the case Ld. CIT (A) erred in not considering the fact that in alike cases of other assessee in similar facts and circumstances AO has considered part of alike bills as to be additions and not 100% amount of wrong bills as are considered as addition in assessee hands being against natural justice and hence addition of Rs. 4,76,225/ may kindly be deleted. 6. On the facts & circumstances of the case, Ld CIT (A) erred in not considering the fact that AO has not doubted the sales of assessee and neither has reconciled the stock and hence mere profit element can be added in the hands of assessee max. 7. On the facts & circumstances of the case, Ld CIT(A) erred in confirming addition under section 69 on basis of suspicion or conjecture of AO being against Supreme Court in case of Kishin chand Chellaram Vs CIT (1980) 125 ITD 713(SC). 8. On the facts & circumstances of the case, Ld CIT (A) erred in not considering the fact that AO failed to consider that neither banking transaction towards alleged bogus purchase was from the bank account of assessee nor the stock delivery place etc. of so called bogus purchases was in assessee premises and hence addition made of Rs.4,76,225/- may kindly be deleted. 9. On the facts and circumstances of the case CIT (A) erred in making addition of Rs 4,76,225/- as deemed gross profit on so called bogus purchase of Rs.4,65,700/- without considering the fact that purchase was not in name of assessee and hence addition of gross profit of Rs.10,525,/ may kindly be deleted. 10. The appellant craves leave to add or amend any ground of the appeal.” 2. When the case was called out for hearing, the ld. AR of the assessee Sh. Dhiraj Ghai, FCA submitted that the assessee had opted for the Direct Taxes Vivad Se Vishwas Scheme, 2024 and that Form No.2 had already been issued by the PCIT, Jabalpur, in response to which, the assessee had deposited the tax and submitted Form No.3. It was submitted that Form No. 4 was still awaited. However, the assessee was prepared to withdraw the appeal subject to liberty being given to reapproach the Tribunal in case From No.4 was not issued. 3. Sh. Alok Bhura, ld. Sr. DR had no objection to the withdrawal of the appeal. ITA No.70/JAB/2024 A.Y. 2011-12 Chandra Kumar Jain 3 4. Accordingly, considering the aforesaid submission of the assessee, the appeal of the assessee is dismissed as withdrawn. The assessee will be at liberty to approach the Tribunal again if the application of the assessee under the Direct Taxes Vivad Se Vishwas Scheme, 2024 is not accepted. 5. In the result, the appeal of the assessee is dismissed. Order pronounced on 21.05.2025 in the open Court. Sd/- Sd/- [KUL BHARAT] [NIKHIL CHOUDHARY] VICE PRESIDENT ACCOUNTANT MEMBER DATED: 21/05/2025 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CITDR , ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. "