INCOME TAX OFFICER, DELHI V. SANTOSH KUMAR MISHRA, NEW DELHI

ITA 2665/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer, Delhi against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which pertained to the assessment year 2021-22. The primary contention was regarding the reduction of the gross profit rate applied on certain disallowed purchases, which the Assessing Officer had initially treated as bogus. The Tribunal's decision focused on the appropriate application of the gross profit rate and the treatment of certain purchases as genuine, which the Assessing Officer had not fully substantiated as bogus.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126755 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2021-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Keywords: Bogus purchase; Accommodation entries; Bogus; Grounds of appeal; Dismissed; National Faceless Appeal; HRA; Commissioner; Commissioner of Income Tax; Purchases; Department
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.2665/Del/2024 Assessment Year: 2021-22 Income Tax Officer, Delhi Vs. Sh. Santosh Kumar Mishra, 2/51, New Rohtak Road, Anand Parvat, Central Delhi, New Delhi PAN: BAIPM3758C (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1062290687(1), dated 09.03.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by None Department by Sh. Sahil Kumar Bansal, Sr. DR Date of hearing 07.04.2025 Date of pronouncement 25.04.2025 ITA No.2665/Del/2024 2 | P a g e 2. Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte. 3. The Revenue raises the following substantive grounds: “1. Whether the Ld. CIT(A) has erred in restricting the additions to the extent of Rs. 90,37,831/-against addition made of Rs. 2,00,16,868/- and reducing GP from 12.5% to 7.5%. 2. Whether on the facts & under the circumstances of the case, the Ld. CIT(A) is justified in holding that the purchase of Rs. 3,96,30,530/- (Out of Rs. 16,01,34,945/-) to be allowed as genuine without appreciating that the AO had concrete evidence to prove that the assessee has introdueed accommodation bogus purchase entry in his books of accounts. 3. The appellant reserves right to add, alter or amend the grounds of appeal on or, before the date of disposal of appeal.” 4. We now advert to the basic relevant facts. A perusal of the Assessing Officer’s assessment discussion dated 20.12.2022 indicates that he had himself treated the assessee/respondent as a proprietor of M/s. R.S. Engineering who failed to verify the corresponding purchases of Rs. 16,01,34,945/-. We note with the able assistance coming from the Revenue side that the learned Assessing Officer had treated the said purchases as bogus accommodation entries in the books of account. And, therefore, he proceeded to disallow the same @ 12.5% only; coming to ITA No.2665/Del/2024 3 | P a g e Rs.2,00,16,868/-, which has been restricted only to that @ 7.5% in the lower appellate discussion. 5. Mr. Bansal vehemently argues that neither the assessee could plead and prove all the relevant foregoing purchases nor there is any indication of him having carried out any actual business activity, as the case may be. 6. We are of the considered view that once the learned Assessing Officer had itself treated the remaining alleged purchases of 87.5% as genuine, his corresponding business activity could be hardly allowed to be doubted in the instant second appellate proceedings under section 254(1) of the Act. That being the case, we find no reason to interfere with the learned CIT(A)/NFAC detailed discussion restricting the impugned disallowance to 12.5% made by the Assessing Officer to 7.5% only with a rider that the same shall not be treated as a precedent in any preceding or succeeding assessment years. Rejected accordingly. 7. This Revenue’s appeal is dismissed. Order pronounced in the open court on 25th April, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25th April, 2025. ITA No.2665/Del/2024 4 | P a g e RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "