GYAN PRAKASH GUPTA,KOLKATA V. I.T.O., WARD - 43(1), KOLKATA

ITA 1567/KOL/2024

AI Insights

The case involves Gyan Prakash Gupta, the appellant, who contested the disallowance of purchases amounting to Rs. 2,23,71,136 by the Income Tax Officer (ITO), Ward-43(1), Kolkata, which was upheld by the Commissioner of Income Tax (Appeals). The disallowance was based on the finding that the entities from whom Gupta purchased goods were fictitious, and the invoices were bogus. The Tribunal acknowledged the assessee's request for another opportunity to present evidence, which was not adequately provided during the earlier proceedings, leading to the decision to remit the case back to the ITO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825131 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 23-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Opportunity of being heard; Bogus
• Section: 147; 148; 142(1); 37

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 1567/KOL/2024 Assessment Year: 2018-19 Gyan Prakash Gupta Vs. I.T.O., Ward-43(1), Kolkata (Appellant) (Respondent) PAN: ACZPG1955F Appearances: Assessee represented by : Chirag Thoria, Ld. AR. Department represented by : Sallong Yaden, Addl. CIT, Sr. DR. Date of concluding the hearing : 29-October-2025 Date of pronouncing the order : 30-December-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 05.06.2024. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the Ld CIT(A) erred in law and in fact to uphold and confirm disallowance of purchase of Rs.2,23,71,136/- by applying the provisions of section 37 when the said amount was claimed as purchase of goods and the provisions of section 37 were not applicable. 2. For that the Ld CIT(A) was not justified to uphold and confirm disallowance of purchase of Rs.2,23,71,136/- when there was no dispute about the corresponding sale of the goods so purchased and there could not Printed from counselvise.com Page | 2 I.T.A. No.: 1567/KOL/2024 Assessment Year: 2018-19 Gyan Prakash Gupta. have been any sale unless such goods was purchased and further the assessee earned reasonable profit on sale of goods so purchased goods. 3. For that on the facts of the Ld. CIT(A) erred in law and in fact to uphold and confirm disallowance of purchase of Rs. 2,23,71,136/- by applying the provisions of section 37 when the goods so purchased was proved with reference to the bills and payment by account payee cheques and further from their GST Portal where the seller himself has accepted the sale of goods, therefore, there was no basis to doubt about the parties simply because the parties were not available on the given address at the time when the Ld AO initiated the enquiry 4. For that on the facts and in the circumstances of the case confirming the addition of Rs. 2,23,71,136/- by the Ld. CIT(A) was not in accordance with law. 5. For that the appellant craves leave to add and/or to modify any grounds of appeal.” 3. Brief facts of the case are that the assessee is an individual and the return of income for the AY 2018-19 was filed on 22.09.2018 showing total income of ₹17,31,310/-. Subsequently, information was received by the Assessing Officer (“the Ld. AO”) through Insight Portal from DDIT (Inv), Unit-1(1), Kolkata to examine the genuineness of assessee's transactions with M/s. Virika Marketing Pvt. Ltd., M/s. Hitakrit Trading Pvt. Ltd., M/s. Daania Trading Pvt. Ltd., M/s. Adarsh Vanijya Udyog and also M/s. Rajbhar Trade Commercial. Based on the information, the assessment was re-opened by issue of notice u/s 148 of the Act, in response to which the assessee filed the return of income showing total income of ₹17,30,280/-. Notices u/s 143(2) & 142(1) of the Act were issued, in response to which the assessee furnished the details called for. On perusal of the details made available, the Ld. AO noted that the five entities from whom the assessee had made purchases of waste paper were fictitious and bogus/fake invoices were issued. Hence, the Ld. AO disallowed the purchases made from those Printed from counselvise.com Page | 3 I.T.A. No.: 1567/KOL/2024 Assessment Year: 2018-19 Gyan Prakash Gupta. five entities to the tune of ₹2,23,71,136/- and added the same as business income. The Ld. AO completed the assessment u/s 147 r.w.s. 144B of the Act by assessing the total income at ₹2,41,01,416/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who perused the assessment order and the written submissions filed by the assessee. The Ld. CIT(A) found that the assessee could not submit any reasonable and acceptable explanation in support of the grounds taken by the assessee, upheld the order of the Ld. AO and dismissed the appeal of the assessee. 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. 6. At the outset, the Ld. AR drew our attention to para 5.5 of the order of the Ld. CIT(A) and stated that the required evidence could not be filed before the Ld. CIT(A). It was submitted that the assessee did not appear before the the Ld. AO as well and requested for another opportunity so that the required evidence could be filed. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. 7. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Bench was of the view that in the interest of justice and fair play, the request of the assessee to remand the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to Printed from counselvise.com Page | 4 I.T.A. No.: 1567/KOL/2024 Assessment Year: 2018-19 Gyan Prakash Gupta. set aside the order of the Ld. CIT(A) and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 30th December, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 30.12.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 5 I.T.A. No.: 1567/KOL/2024 Assessment Year: 2018-19 Gyan Prakash Gupta. Copy of the order forwarded to: 1. Gyan Prakash Gupta, 419, Rabindra Sarani, Kolkata, West Bengal, 700005. 2. I.T.O., Ward-43(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "