INCOME TAX OFFICER, PIRAMAL CHAMBERS MUMBAI V. BHARAT HIRALAL SHAH, MUMBAI

ITA 729/MUM/2025

AI Insights

The case involves the Income Tax Department appealing against the order of the Ld. CIT(A) which had deleted an addition made by the Assessing Officer on account of bogus purchases from hawala traders. The Assessing Officer had made an addition of Rs. 14,60,201, representing 12.5% of total purchases amounting to Rs. 1,16,81,604, based on information from the Sales Tax Department and DGIT (Investigation Wing) Mumbai, which indicated that these purchases were from non-genuine sources. The Ld. CIT(A) deleted this addition, citing lack of independent verification by the Assessing Officer and acceptance of the documentary evidence provided by the assessee. However, the Tribunal found that the CIT(A) had not conducted a proper inquiry and had overlooked the need for verification of the actual delivery of goods corresponding to the purchases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717247 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 31-01-2025
• Other Referred Cases: M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj) 354, PCIT VS S. V. Jiwani (2022) 145 taxmann.com (Bombay), CIT Vs Simit Sheth, Sri. Ganesh Rice Mills Vs. CIT 294 ITR 316 (All), Kanak Impex, Jansampark Advertising and marketing P Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: KHUSHALI PANDYA
• Keywords: Set aside; Bogus purchase; Tax effect; Principle of natural justice; Accommodation entries; Reason to believe; Bogus
• Section: 148; 143(3); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 729/MUM/2025 Assessment Year: 2010-11 ITO, 501 5th floor, Income Tax Office Piramal Chambers Lalbaug, Mumbai-400012. Vs. Bharat Hiralal Shah, 220, 4th floor Badrikashram 1st Khetwadi Lane, Mumbai-400004. PAN NO. AAEPS 5511 N Appellant Respondent Assessee by : Ms. Khushali Pandya Revenue by : Mr. Pravin Salunkhe, Sr. DR Date of Hearing : 24/06/2025 Date of pronouncement : 12/08/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 31.01.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 2, Barodra [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2010-11, raising following grounds: 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/- made on account of bogus purchases from 11 bogus hawala traders by ignoring the fact Printed from counselvise.com that the assessee has availed accommodation entries for alleged bogus purchases ?\" 2. Whether on the facts an CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on accourit of bogus purchases from 11 bogus hawala traders without appreciating the fact tha based on the information received from Sales Tax Department through DGIT (Investigation Wing) Mumbai, that these 11 hawala parties were involved in providing accommodation entries in the form of issuing bogus sales actual delivery of goods and the assessee was found to be one of the beneficiary who have obtained such accommodation entries from hawala traders against the non 1,16,81,604/ 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/ account of bogus purchases from 11 hawala traders, the fact that during the Re could neither produce the quantity tally of day to day purchases, Sales, Stocks, Delivery Challans and corresponding values nor could produce the parties for verification, in spit provided by the Assessing Officer?\" 4. ⁠4. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purchases from 11 hawala traders, by ignoring the fact that the assessee has availed accommodation entries, but failed to prove the genuineness of the alleged transactions as well as creditworthiness of hawala traders from whom the alleged purchases were purportedly made?\" 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purcha without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that when the purchases mo entire purchases are liable to disallowed ?\" ITA No. 729/MUM/2025 that the assessee has availed accommodation entries for alleged bogus purchases ?\" 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on accourit of bogus purchases from 11 bogus hawala traders without appreciating the fact that the action of the assessing officer was based on the information received from Sales Tax Department through DGIT (Investigation Wing) Mumbai, that these 11 hawala parties were involved in providing accommodation entries in the form of issuing bogus sales/purchases invoices/bills, without actual delivery of goods and the assessee was found to be one of the beneficiary who have obtained such accommodation entries from hawala traders against the non-genuine purchases of Rs. 1,16,81,604/- to suppress the true profit ?\" 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/- made by the AO on account of bogus purchases from 11 hawala traders, the fact that during the Re-assessment Proceedings, the assessee could neither produce the quantity tally of day to day purchases, Sales, Stocks, Delivery Challans and corresponding values nor could produce the parties for verification, in spite of opportunity provided by the Assessing Officer?\" . Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purchases from 11 hawala traders, by ignoring the fact that the assessee has availed accommodation entries, but failed to prove the genuineness of the alleged transactions as well as creditworthiness of hawala traders from whom the alleged purchases were purportedly made?\" 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purchases from 11 hawala traders/parties without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that when the purchases mode are from bogus suppliers or concerns, the entire purchases are liable to disallowed ?\" Bharat Hiralal Shah 2 ITA No. 729/MUM/2025 that the assessee has availed accommodation entries for alleged d circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on accourit of bogus purchases from 11 bogus hawala traders without t the action of the assessing officer was based on the information received from Sales Tax Department through DGIT (Investigation Wing) Mumbai, that these 11 hawala parties were involved in providing accommodation entries in the /purchases invoices/bills, without actual delivery of goods and the assessee was found to be one of the beneficiary who have obtained such accommodation entries genuine purchases of Rs. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/- being made by the AO on account of bogus purchases from 11 hawala traders, by ignoring assessment Proceedings, the assessee could neither produce the quantity tally of day to day purchases, Sales, Stocks, Delivery Challans and corresponding values nor e of opportunity . Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purchases from 11 hawala traders, by ignoring the fact that the assessee has availed accommodation entries, but failed to prove the genuineness of the alleged transactions as well as creditworthiness of hawala traders from whom the alleged bogus 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on ses from 11 hawala traders/parties without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that de are from bogus suppliers or concerns, the Printed from counselvise.com 6. Whether on the facts and circumstances of the case and in low, the order of the Ld. CIT(A), perverse in not considering that the order of Hon'ble Supreme Court in Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017, which is on the similar issue of bogus purchases, was already the law of the land when the Ld. CIT(A) has pronounced it's order on 27.11.2024?\" 7. Whether on the CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/ made on account of bogus purchases from 11 hawala traders/parties without appreciating the fact tha (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the disallowance of the bogus purchase, by stating that the purchases shown from respective parties were found non decision of the ITAT was u also by the Hon'ble Supreme Court?\" 8. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/ bogus purchases from 11 hawala traders, without appreciating the ratio of the decision of the Hon'ble Bombay High Court in case of PCIT VS S. V. Jiwani (2022) 145 taxmann.com (Bombay) and Hon'ble Gujarat High Court in case of CIT Vs Simit She the Court upheld the decision of the Hon'ble ITAT, Mumbai and Ahmadabad respectively, which had held that entire purchases made by the assessee could not be added back as income, but only as profit element embedded therein and had restricted th to 12.5% of the purchases ?\" 9. 9. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/ bogus purchases fr after invocation of provisions of section 145(3) of the Act, the Assessing Officer acquired the mandate even to add the whole amount of purchases found as bogus to the total income of the assessee and without Mills Vs. CIT 294 ITR 316 (All), wherein the entire amount of bogus purchases, from five parties, was disallowed and same was also upheld ?\" 10. The tax-effect involved in the instant case is Rs. 4,64,343/, which is below the prescribed limit as per CBDT's Circular F.No. 279/Misc. 142/2007 17.09.2024. However, this case falls under one of the exceptions ITA No. 729/MUM/2025 6. Whether on the facts and circumstances of the case and in low, the order of the Ld. CIT(A), perverse in not considering that the order of Hon'ble Supreme Court in the case of M/s. N. Κ. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017, which is on the similar issue of bogus purchases, was already the law of the land when the Ld. CIT(A) has pronounced it's order on 27.11.2024?\" 7. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/ made on account of bogus purchases from 11 hawala traders/parties without appreciating the fact that in the case of M/s. Swetamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the disallowance of the bogus purchase, by stating that the purchases shown from respective parties were found non- genuine and the decision of the ITAT was upheld by Hon'ble Gujrat High Court and also by the Hon'ble Supreme Court?\" 8. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/- made bogus purchases from 11 hawala traders, without appreciating the ratio of the decision of the Hon'ble Bombay High Court in case of PCIT VS S. V. Jiwani (2022) 145 taxmann.com (Bombay) and Hon'ble Gujarat High Court in case of CIT Vs Simit She the Court upheld the decision of the Hon'ble ITAT, Mumbai and Ahmadabad respectively, which had held that entire purchases made by the assessee could not be added back as income, but only as profit element embedded therein and had restricted th to 12.5% of the purchases ?\" 9. 9. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ 12.5% of total purchases of Rs. 1,16,81,604/- made on account of bogus purchases from 11 hawala traders, without considering that after invocation of provisions of section 145(3) of the Act, the Assessing Officer acquired the mandate even to add the whole amount of purchases found as bogus to the total income of the assessee and without considering the decision in Sri. Ganesh Rice Mills Vs. CIT 294 ITR 316 (All), wherein the entire amount of bogus purchases, from five parties, was disallowed and same was also effect involved in the instant case is Rs. 4,64,343/, h is below the prescribed limit as per CBDT's Circular F.No. 279/Misc. 142/2007-ITJ(Pt) amended vide No. 09/2024 dated. 17.09.2024. However, this case falls under one of the exceptions Bharat Hiralal Shah 3 ITA No. 729/MUM/2025 6. Whether on the facts and circumstances of the case and in low, the order of the Ld. CIT(A), perverse in not considering that the order the case of M/s. N. Κ. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017, which is on the similar issue of bogus purchases, was already the law of the land when the Ld. CIT(A) has pronounced it's order on 27.11.2024?\" facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/-being 12.5% of total purchases of Rs. 1,16,81,604/ made on account of bogus purchases from 11 hawala traders/parties without t in the case of M/s. Swetamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the disallowance of the bogus purchase, by stating that the purchases genuine and the pheld by Hon'ble Gujrat High Court and 8. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/- being made on account of bogus purchases from 11 hawala traders, without appreciating the ratio of the decision of the Hon'ble Bombay High Court in case of PCIT VS S. V. Jiwani (2022) 145 taxmann.com (Bombay) and Hon'ble Gujarat High Court in case of CIT Vs Simit Sheth, wherein the Court upheld the decision of the Hon'ble ITAT, Mumbai and Ahmadabad respectively, which had held that entire purchases made by the assessee could not be added back as income, but only as profit element embedded therein and had restricted the addition 9. 9. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/- being made on account of om 11 hawala traders, without considering that after invocation of provisions of section 145(3) of the Act, the Assessing Officer acquired the mandate even to add the whole amount of purchases found as bogus to the total income of the considering the decision in Sri. Ganesh Rice Mills Vs. CIT 294 ITR 316 (All), wherein the entire amount of bogus purchases, from five parties, was disallowed and same was also effect involved in the instant case is Rs. 4,64,343/, h is below the prescribed limit as per CBDT's Circular F.No. ITJ(Pt) amended vide No. 09/2024 dated. 17.09.2024. However, this case falls under one of the exceptions Printed from counselvise.com specified in paragraph 3.1 (c) of the above stated Circular, wherein it is stated that in cases involving \"Organized Tax Evasion\", including cases of accommodation entries of bogus purchases, the decision to file appeal/SLP shall be taken on merit without regard to the tax effect and the 2. Briefly stated, fac individual, was engaged in the business of trading in ferrous ferrous metal and iron namely M/s Paradise Steel. For the year under consideration, the assessee filed its original return of income on 27.09.2010 declaring total income at Rs.2,21,476/ assessee was processed u/s 143(1) of the Income short ‘the Act’). Subsequently, an information was received by the Assessing Officer from the office of the Director General on Income tax (Investigation), Mumbai that the assessee was engage accepting bogus purchases In view of information received, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly issued notice u/s 148 of the Act on 10.02.2015 served upon the assessee. Thereafter, the stat issued and reassessment the Assessing Officer provided the assessee, which is extracted as under: Sr. No. Name of the party 1 CHAMPION STEEL ( 2 SHUBHAM METAL CORP ITA No. 729/MUM/2025 specified in paragraph 3.1 (c) of the above stated Circular, wherein is stated that in cases involving \"Organized Tax Evasion\", including cases of accommodation entries of bogus purchases, the decision to file appeal/SLP shall be taken on merit without regard to the tax effect and the monetary limit. Briefly stated, facts of the case are that the assessee an was engaged in the business of trading in ferrous ferrous metal and iron & steel alloys through a proprietary concern namely M/s Paradise Steel. For the year under consideration, the its original return of income on 27.09.2010 declaring total income at Rs.2,21,476/-. The return of income filed by the assessee was processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’). Subsequently, an information was received by the ssing Officer from the office of the Director General on Income tax (Investigation), Mumbai that the assessee was engage accepting bogus purchases bills from bogus ‘hawala In view of information received, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly issued notice u/s 148 of the Act on 10.02.2015, which was duly served upon the assessee. Thereafter, the statutory notic issued and reassessment was commenced. During reassessment , he Assessing Officer provided a list of the purchases in dispute to which is extracted as under: Name of the party Amount CHAMPION STEEL ( INDIA) 44,510/ SHUBHAM METAL CORP 91,912/ Bharat Hiralal Shah 4 ITA No. 729/MUM/2025 specified in paragraph 3.1 (c) of the above stated Circular, wherein is stated that in cases involving \"Organized Tax Evasion\", including cases of accommodation entries of bogus purchases, the decision to file appeal/SLP shall be taken on merit without regard to ts of the case are that the assessee an was engaged in the business of trading in ferrous & non- steel alloys through a proprietary concern namely M/s Paradise Steel. For the year under consideration, the its original return of income on 27.09.2010 declaring . The return of income filed by the tax Act, 1961 (in short ‘the Act’). Subsequently, an information was received by the ssing Officer from the office of the Director General on Income- tax (Investigation), Mumbai that the assessee was engaged in hawala’ bill providers. In view of information received, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly which was duly utory notices were During reassessment , list of the purchases in dispute to Amount (Rs.) 44,510/- 91,912/- Printed from counselvise.com 3 CHI RAG STEEL CENTRE 4 RELIABLE METAL ( INDIA) 5 JINALAY TRADING 6 AVION SALES 7 RAJESHWATI TRADING 8 SIDDHIVINAYAK CORP 9 NAKODA 10 NAVKAR METAL TOTAL 4. The Assessing Officer accordingly asked the assessee to justify the genuineness of those purchases and specifically asked to produce the aforementioned parties for verification along with their books of accounts. The assessee failed in doing so and therefo the Assessing Officer keeping in view judicial precedents on the issue in dispute made addition @ 12.5% of the purchases in dispute of Rs.1,16,81,604/- which was worked out to Rs.14,60,201/ 5. On further appeal, the Ld. CIT(A) deleted the addition m for the two reasons, f any independent verification including issue of notice u/s 133(6) of the Act, secondly, the Assessing Officer did not dispute the documentary evidence assessee. The relevant finding of the Ld. CIT(A) is reproduced as under: ITA No. 729/MUM/2025 CHI RAG STEEL CENTRE 15,27,196/ RELIABLE METAL ( INDIA) 12,10,112/ JINALAY TRADING 17,95,781/ AVION SALES 26,18,303/ RAJESHWATI TRADING 1,97,493/ SIDDHIVINAYAK CORP 4,992/ NAKODA TUBES 18,72,837/ NAVKAR METAL 23,18,468/ 1,16,81,604/ The Assessing Officer accordingly asked the assessee to justify the genuineness of those purchases and specifically asked to produce the aforementioned parties for verification along with their books of accounts. The assessee failed in doing so and therefo the Assessing Officer keeping in view judicial precedents on the issue in dispute made addition @ 12.5% of the purchases in dispute which was worked out to Rs.14,60,201/ On further appeal, the Ld. CIT(A) deleted the addition m for the two reasons, firstly, the Assessing Officer failed to undertake any independent verification including issue of notice u/s 133(6) of the Act, secondly, the Assessing Officer did not dispute the documentary evidences in support of purchases fi assessee. The relevant finding of the Ld. CIT(A) is reproduced as Bharat Hiralal Shah 5 ITA No. 729/MUM/2025 15,27,196/- 12,10,112/- 17,95,781/- 26,18,303/- 1,97,493/- 4,992/- 18,72,837/- 23,18,468/- 1,16,81,604/- The Assessing Officer accordingly asked the assessee to justify the genuineness of those purchases and specifically asked to produce the aforementioned parties for verification along with their books of accounts. The assessee failed in doing so and therefore, the Assessing Officer keeping in view judicial precedents on the issue in dispute made addition @ 12.5% of the purchases in dispute which was worked out to Rs.14,60,201/-. On further appeal, the Ld. CIT(A) deleted the addition mainly irstly, the Assessing Officer failed to undertake any independent verification including issue of notice u/s 133(6) of the Act, secondly, the Assessing Officer did not dispute the in support of purchases filed by the assessee. The relevant finding of the Ld. CIT(A) is reproduced as Printed from counselvise.com “7.1 The sole ground of appeal taken by the appellant is that the learned Assessing Officer has made an addition of Rs. 14,60,201 being 12.5 percent of Rs 1,16,81,604 on ac purchases. The appellant’s submissions have been meticulously reviewed, and it is observed that the Assessing Officer (AO), in her order under section 143(3) read with section 147, assessed the appellant's total income at Rs. 16,81,680/ included an addition of Rs. 14,60,201/ of the appellant’s total purchases of Rs. 1,16,81,604/ impugned purchase parties. The AO attributed this addition to the purchases made from certain parties, which were d non-genuine and identified as \"tainted\" by the sales tax department and the Directorate General of Income Tax (DGIT) Investigation. 7.2 It is also observed that the appellant, during the assessment proceedings, has submitted comprehensive documentati substantiate the genuineness of the transactions. These included the stock register, purchase bills/registers, lorry receipts, sale registers, and other supporting documents. Furthermore, the appellant provided PAN/TAN number of the alleged non parties, copies of purchase invoices from the alleged non suppliers, which were cross invoices and bank statements to demonstrate payments made to these suppliers via account payee cheques. Additionally, detail information regarding the creditors was also submitted for verification. 7.3: These during the assessment were acknowledged and accepted by the AO in the assessment order. As per para 6.3 of the assessment order, the AO explicitly recorded: \"The explanation offered by the assessee and the documentary evidence produced by the assessee has been carefully perused and considered. He has reiterated in his explanation that all the purchases are recorded in the books of account and subsequent item-wise sales of the goods purchased. He has also highlighted that the payments have been invariably made by account payee cheque. He also submitted that the availability of TAN and VAT numbers, coupled with bank account details, conclusively proves the identity of the supplier beyond doubt. 7.4. Upon examining the assessment order, it is evident that the AO’s decision to treat these purchases as bogus was predominantly based on the information ITA No. 729/MUM/2025 The sole ground of appeal taken by the appellant is that the learned Assessing Officer has made an addition of Rs. 14,60,201 being 12.5 percent of Rs 1,16,81,604 on account of unproved The appellant’s submissions have been meticulously reviewed, and it is observed that the Assessing Officer (AO), in her order under section 143(3) read with section 147, assessed the appellant's total income at Rs. 16,81,680/-. This amount included an addition of Rs. 14,60,201/-, which represent 12.5% of the appellant’s total purchases of Rs. 1,16,81,604/ impugned purchase parties. The AO attributed this addition to the purchases made from certain parties, which were d genuine and identified as \"tainted\" by the sales tax department and the Directorate General of Income Tax (DGIT) It is also observed that the appellant, during the assessment proceedings, has submitted comprehensive documentati substantiate the genuineness of the transactions. These included the stock register, purchase bills/registers, lorry receipts, sale registers, and other supporting documents. Furthermore, the appellant provided PAN/TAN number of the alleged non parties, copies of purchase invoices from the alleged non suppliers, which were cross-referenced with corresponding sale invoices and bank statements to demonstrate payments made to these suppliers via account payee cheques. Additionally, detail information regarding the creditors was also submitted for documents were also presented to the AO during the assessment proceedings and the appellant’s claims were acknowledged and accepted by the AO in the assessment per para 6.3 of the assessment order, the AO explicitly \"The explanation offered by the assessee and the documentary evidence produced by the assessee has been carefully perused and considered. He has reiterated in his explanation that all the urchases are recorded in the books of account and subsequent wise sales of the goods purchased. He has also highlighted that the payments have been invariably made by account payee cheque. He also submitted that the availability of TAN and VAT , coupled with bank account details, conclusively proves the identity of the supplier beyond doubt. 7.4. Upon examining the assessment order, it is evident that the AO’s decision to treat these purchases as bogus was predominantly based on the information provided by the sales Bharat Hiralal Shah 6 ITA No. 729/MUM/2025 The sole ground of appeal taken by the appellant is that the learned Assessing Officer has made an addition of Rs. 14,60,201 count of unproved The appellant’s submissions have been meticulously reviewed, and it is observed that the Assessing Officer (AO), in her order under section 143(3) read with section 147, assessed This amount , which represent 12.5% of the appellant’s total purchases of Rs. 1,16,81,604/- from the impugned purchase parties. The AO attributed this addition to the purchases made from certain parties, which were deemed genuine and identified as \"tainted\" by the sales tax department and the Directorate General of Income Tax (DGIT) It is also observed that the appellant, during the assessment proceedings, has submitted comprehensive documentation to substantiate the genuineness of the transactions. These included the stock register, purchase bills/registers, lorry receipts, sale registers, and other supporting documents. Furthermore, the appellant provided PAN/TAN number of the alleged non-genuine parties, copies of purchase invoices from the alleged non-genuine referenced with corresponding sale invoices and bank statements to demonstrate payments made to these suppliers via account payee cheques. Additionally, detailed information regarding the creditors was also submitted for also presented to the AO proceedings and the appellant’s claims were acknowledged and accepted by the AO in the assessment per para 6.3 of the assessment order, the AO explicitly \"The explanation offered by the assessee and the documentary evidence produced by the assessee has been carefully perused and considered. He has reiterated in his explanation that all the urchases are recorded in the books of account and subsequent wise sales of the goods purchased. He has also highlighted that the payments have been invariably made by account payee cheque. He also submitted that the availability of TAN and VAT , coupled with bank account details, conclusively proves 7.4. Upon examining the assessment order, it is evident that the AO’s decision to treat these purchases as bogus was provided by the sales Printed from counselvise.com tax department and the DGIT (Investigation), which listed the suppliers as potentially fraudulent. However, the AO failed to undertake an substantiate the allegations of bogus purchases. No did not invoke section 133(6) of the Income Tax Act to request information directly from the suppliers, which would have been a crucial step in verifying the authenticity of the transactions. This oversight in conducting due diligence raises regarding the thoroughness of the assessment process 7.5 Further, the AO did not dispute any of the documentary evidence provided by the appellant. Despite this, the AO concluded that the purchases should be treated as bogus solely because the appellant was unable to produce the suppliers before him. This conclusion is problematic because, if the purchases were recorded in the books and the corresponding sales were not challenged, the authenticity of these records should, by implicatio decision to reject the purchases as bogus based on the failure to produce the suppliers directly contradicts the findings and acceptance of the documentary evidence. 5.1 Further, the Ld. CIT(A) held that the Asse provide opportunity of cross Assessing Officer proceeded to make the addition solely of the inability of the assessee to produce those part of his decision is reproduced as “7.7 Therefore, the appellant has successfully discharged the onus of proving the identity and genuineness of the disputed purchases. The documentary evidence presented PAN/TAN of the parties, stock registers, purchase and sale invoices, and bank payment records the legitimacy of the transactions. It is important to note that the purchases were made approximately seven years ago, and the AO’s failure to account for this temporal gap when assessing the evidence is another significant oversight. Moreover, the AO’s refusal to supply the copy of statements recorded by the Sales Tax authorities on the basis of which the reason to believe was formed and allow cross appellant’s explicit request during the assessment proceedings, constitutes a violation of the principles of natural justice, which ITA No. 729/MUM/2025 tax department and the DGIT (Investigation), which listed the suppliers as potentially fraudulent. However, the AO failed to undertake an independent investigation or verification to substantiate the allegations of bogus purchases. Notably, the AO did not invoke section 133(6) of the Income Tax Act to request information directly from the suppliers, which would have been a crucial step in verifying the authenticity of the transactions. This oversight in conducting due diligence raises significant concerns regarding the thoroughness of the assessment process 7.5 Further, the AO did not dispute any of the documentary evidence provided by the appellant. Despite this, the AO concluded that the purchases should be treated as bogus solely cause the appellant was unable to produce the suppliers before him. This conclusion is problematic because, if the purchases were recorded in the books and the corresponding sales were not challenged, the authenticity of these records should, by implication, have been accepted. Therefore, the AO’s decision to reject the purchases as bogus based on the failure to produce the suppliers directly contradicts the findings and acceptance of the documentary evidence.” the Ld. CIT(A) held that the Assessing Officer did not provide opportunity of cross-examination of the suppliers and the Assessing Officer proceeded to make the addition solely of the y of the assessee to produce those supplier part of his decision is reproduced as under: Therefore, the appellant has successfully discharged the onus of proving the identity and genuineness of the disputed purchases. The documentary evidence presented — PAN/TAN of the parties, stock registers, purchase and sale and bank payment records — adequately demonstrates the legitimacy of the transactions. It is important to note that the purchases were made approximately seven years ago, and the AO’s failure to account for this temporal gap when assessing the another significant oversight. Moreover, the AO’s refusal to supply the copy of statements recorded by the Sales Tax authorities on the basis of which the reason to believe was formed and allow cross-examination of the suppliers, despite the xplicit request during the assessment proceedings, constitutes a violation of the principles of natural justice, which Bharat Hiralal Shah 7 ITA No. 729/MUM/2025 tax department and the DGIT (Investigation), which listed the suppliers as potentially fraudulent. However, the AO failed to independent investigation or verification to tably, the AO did not invoke section 133(6) of the Income Tax Act to request information directly from the suppliers, which would have been a crucial step in verifying the authenticity of the transactions. This significant concerns regarding the thoroughness of the assessment process. 7.5 Further, the AO did not dispute any of the documentary evidence provided by the appellant. Despite this, the AO concluded that the purchases should be treated as bogus solely cause the appellant was unable to produce the suppliers before him. This conclusion is problematic because, if the purchases were recorded in the books and the corresponding sales were not challenged, the authenticity of these records n, have been accepted. Therefore, the AO’s decision to reject the purchases as bogus based on the failure to produce the suppliers directly contradicts the findings and ssing Officer did not examination of the suppliers and the Assessing Officer proceeded to make the addition solely of the suppliers. The relevant Therefore, the appellant has successfully discharged the onus of proving the identity and genuineness of the disputed — including PAN/TAN of the parties, stock registers, purchase and sale adequately demonstrates the legitimacy of the transactions. It is important to note that the purchases were made approximately seven years ago, and the AO’s failure to account for this temporal gap when assessing the another significant oversight. Moreover, the AO’s refusal to supply the copy of statements recorded by the Sales Tax authorities on the basis of which the reason to believe was examination of the suppliers, despite the xplicit request during the assessment proceedings, constitutes a violation of the principles of natural justice, which Printed from counselvise.com demand a fair opportunity for the appellant to challenge the allegations. 7.7 At this point it is beyond doubt that the appellant has provided substantial documentary evidence that was accepted by the AO, yet the AO proceeded to make the addition based solely on the inability of the appellant to produce the suppliers. This action was not only inconsistent with the accepted documentary evide judicial precedents. The AO’s decision to treat the purchases as bogus without any concrete basis or independent verification is erroneous. Given the comprehensive evidence presented by the appellant, the lack of cr established judicial guidelines, it is clear that the addition of Rs. 14,60,201 made by the AO was without merit. For the reasons outlined above, the addition of Rs. 14,60,201/ hereby deleted, and the appeal i 6. We have heard the learned counsel for the parties and carefully perused the material placed on record. The contentions advanced on behalf of the assessee are twofold. First, it is urged that the assessee had furnished all documents in purchases in question, including purchase bills, entries in the registered purchase register, stock register, and evidence of payment through banking channels. It is submitted that the learned CIT(A) has recorded that such documents were pro before the Assessing Officer, though the assessment order contains no reference to the production of such records. 6.1 Be that as it may, the core issue in matters involving “hawala” or accommodation purchase bills does not turn upon the mere existence of invoices, purchase registers, stock records, or proof of ITA No. 729/MUM/2025 demand a fair opportunity for the appellant to challenge the At this point it is beyond doubt that the appellant has vided substantial documentary evidence that was accepted by the AO, yet the AO proceeded to make the addition based solely on the inability of the appellant to produce the suppliers. This action was not only inconsistent with the accepted documentary evidence but also contrary to the established judicial precedents. The AO’s decision to treat the purchases as bogus without any concrete basis or independent verification is Given the comprehensive evidence presented by the appellant, the lack of cross- examination of the suppliers, and the established judicial guidelines, it is clear that the addition of Rs. 14,60,201 made by the AO was without merit. For the reasons outlined above, the addition of Rs. 14,60,201/ hereby deleted, and the appeal is \"Allowed\".” We have heard the learned counsel for the parties and carefully perused the material placed on record. The contentions advanced on behalf of the assessee are twofold. First, it is urged that the assessee had furnished all documents in purchases in question, including purchase bills, entries in the registered purchase register, stock register, and evidence of payment through banking channels. It is submitted that the learned CIT(A) has recorded that such documents were pro before the Assessing Officer, though the assessment order contains no reference to the production of such records. Be that as it may, the core issue in matters involving “hawala” or accommodation purchase bills does not turn upon the mere ce of invoices, purchase registers, stock records, or proof of Bharat Hiralal Shah 8 ITA No. 729/MUM/2025 demand a fair opportunity for the appellant to challenge the At this point it is beyond doubt that the appellant has vided substantial documentary evidence that was accepted by the AO, yet the AO proceeded to make the addition based solely on the inability of the appellant to produce the suppliers. This action was not only inconsistent with the accepted nce but also contrary to the established judicial precedents. The AO’s decision to treat the purchases as bogus without any concrete basis or independent verification is Given the comprehensive evidence presented by the appellant, examination of the suppliers, and the established judicial guidelines, it is clear that the addition of Rs. For the reasons outlined above, the addition of Rs. 14,60,201/- is We have heard the learned counsel for the parties and carefully perused the material placed on record. The contentions advanced on behalf of the assessee are twofold. First, it is urged that the assessee had furnished all documents in support of the purchases in question, including purchase bills, entries in the registered purchase register, stock register, and evidence of payment through banking channels. It is submitted that the learned CIT(A) has recorded that such documents were produced before the Assessing Officer, though the assessment order contains Be that as it may, the core issue in matters involving “hawala” or accommodation purchase bills does not turn upon the mere ce of invoices, purchase registers, stock records, or proof of Printed from counselvise.com payment by cheque. The real question is whether the alleged supplier parties had, in fact, effected delivery of the goods to the assessee. The statutory onus rests squarely upon the assessee to establish the genuineness of the purchases by producing credible evidence of actual delivery of goods corresponding to the invoices recorded in the books of account. 6.2 In the present case, no documentary proof of transportation or any expenditure relata placed on record, either before the Assessing Officer or before the learned CIT(A). In the absence of such evidence, the deletion of the addition by the learned CIT(A) merely on the premise that documentary records and that the assessee had thus discharged his onus, cannot be sustained in law. 6.3 The second reasoning advanced by the learned CIT(A) is that the Assessing Officer conducted no independent inquiry and merel relied upon information from the Sales Tax Department, without issuing notices under section 133(6) of the Act. This contention is equally untenable. The assessment order records that the Assessing Officer specifically called upon the assessee to produce parties, along with their books of account, for verification. The assessee expressed his inability to do so, stating that the said parties were not traceable at their known addresses. Even when ITA No. 729/MUM/2025 payment by cheque. The real question is whether the alleged supplier parties had, in fact, effected delivery of the goods to the assessee. The statutory onus rests squarely upon the assessee to establish the genuineness of the purchases by producing credible evidence of actual delivery of goods corresponding to the invoices recorded in the books of account. In the present case, no documentary proof of transportation or any expenditure relatable to the movement of the goods has been placed on record, either before the Assessing Officer or before the learned CIT(A). In the absence of such evidence, the deletion of the addition by the learned CIT(A) merely on the premise that documentary records such as invoices and registers were available, and that the assessee had thus discharged his onus, cannot be The second reasoning advanced by the learned CIT(A) is that the Assessing Officer conducted no independent inquiry and merel relied upon information from the Sales Tax Department, without issuing notices under section 133(6) of the Act. This contention is equally untenable. The assessment order records that the Assessing Officer specifically called upon the assessee to produce parties, along with their books of account, for verification. The assessee expressed his inability to do so, stating that the said parties were not traceable at their known addresses. Even when Bharat Hiralal Shah 9 ITA No. 729/MUM/2025 payment by cheque. The real question is whether the alleged supplier parties had, in fact, effected delivery of the goods to the assessee. The statutory onus rests squarely upon the assessee to establish the genuineness of the purchases by producing credible evidence of actual delivery of goods corresponding to the invoices In the present case, no documentary proof of transportation or ble to the movement of the goods has been placed on record, either before the Assessing Officer or before the learned CIT(A). In the absence of such evidence, the deletion of the addition by the learned CIT(A) merely on the premise that such as invoices and registers were available, and that the assessee had thus discharged his onus, cannot be The second reasoning advanced by the learned CIT(A) is that the Assessing Officer conducted no independent inquiry and merely relied upon information from the Sales Tax Department, without issuing notices under section 133(6) of the Act. This contention is equally untenable. The assessment order records that the Assessing Officer specifically called upon the assessee to produce the supplier parties, along with their books of account, for verification. The assessee expressed his inability to do so, stating that the said parties were not traceable at their known addresses. Even when Printed from counselvise.com called upon to furnish the latest addresses of t assessee failed to do so. 6.4 In such circumstances, the Assessing Officer cannot be faulted for not issuing notices under section 133(6) of the Act, for when the assessee himself admits that the parties are untraceable and fails to provide any current address, the issuance of such notices would be an exercise in futility. The law is well whom the assessee claims to have made purchases are his own witnesses, and the primary onus lies upon the assessee to produ them for verification. The plea that cross been provided is equally misconceived, for such a right does not arise where the assessee fails to produce his own suppliers for examination in the first instance. Assessing Officer violating principle of natural justice by way of not provided cross-examination is contrary to the law. this reasoning of the Ld. CIT(A) is also not justified therefore, of the considered view that both t relied upon by the learned CIT(A) for deleting the addition are unsustainable in law 6.5 Further, the Ld. CIT(A) himself was having authority to carry out investigations or provide opportunity of cross the assessee or pr Assessing Officer but he failed in doing so. Hon’ble Delhi High Court in the case of ITA No. 729/MUM/2025 called upon to furnish the latest addresses of these parties, the assessee failed to do so. In such circumstances, the Assessing Officer cannot be faulted for not issuing notices under section 133(6) of the Act, for when the assessee himself admits that the parties are untraceable and fails to de any current address, the issuance of such notices would be an exercise in futility. The law is well-settled that the parties from whom the assessee claims to have made purchases are his own witnesses, and the primary onus lies upon the assessee to produ them for verification. The plea that cross-examination ought to have been provided is equally misconceived, for such a right does not arise where the assessee fails to produce his own suppliers for examination in the first instance. Therefore, to hold t Assessing Officer violating principle of natural justice by way of not examination is contrary to the law. In view of above, this reasoning of the Ld. CIT(A) is also not justified therefore, of the considered view that both the principal grounds relied upon by the learned CIT(A) for deleting the addition are unsustainable in law Further, the Ld. CIT(A) himself was having authority to carry out investigations or provide opportunity of cross- the assessee or providing relevant material gathered by the Assessing Officer but he failed in doing so. Further, we find that the Hon’ble Delhi High Court in the case of Bharat Hiralal Shah 10 ITA No. 729/MUM/2025 hese parties, the In such circumstances, the Assessing Officer cannot be faulted for not issuing notices under section 133(6) of the Act, for when the assessee himself admits that the parties are untraceable and fails to de any current address, the issuance of such notices would be settled that the parties from whom the assessee claims to have made purchases are his own witnesses, and the primary onus lies upon the assessee to produce examination ought to have been provided is equally misconceived, for such a right does not arise where the assessee fails to produce his own suppliers for Therefore, to hold that the Assessing Officer violating principle of natural justice by way of not In view of above, this reasoning of the Ld. CIT(A) is also not justified We are, he principal grounds relied upon by the learned CIT(A) for deleting the addition are Further, the Ld. CIT(A) himself was having authority to carry -examination to oviding relevant material gathered by the Further, we find that the Hon’ble Delhi High Court in the case of Jansampark Printed from counselvise.com Advertising and marketing P Ltd in if the assessing officer required in the matter, then the Ld. CIT(A) is under obligation to carry out such enquires and he cannot sit ideal and allow relief to the either of party. The relevant part of decision is reproduced as under: 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements rev a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 submitted at the stage of appeals, if deemed proper by way of making or causing to be made a \"further inquiry\" in exercise of the power under Section 250(4) impugned order of ITAT, and consequently that of CIT (Appeals), cannot be approved or upheld. 6.6 Further, the learned Departmental Representative relied upon the judgment of the Hon’ble Bombay High Court in (India) Ltd in ITA 791 of 2021 squarely applies to the facts of the present case. The learned ITA No. 729/MUM/2025 and marketing P Ltd in ITA 525/2014 has held that if the assessing officer fails in carrying out the enquiries which are required in the matter, then the Ld. CIT(A) is under obligation to carry out such enquires and he cannot sit ideal and allow relief to the either of party. The relevant part of decision is reproduced as 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements rev a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a \"further inquiry\" in exercise of the power Section 250(4). This approach not having been adopted, the impugned order of ITAT, and consequently that of CIT (Appeals), cannot be approved or upheld. he learned Departmental Representative relied upon e Hon’ble Bombay High Court in (India) Ltd in ITA 791 of 2021 contending that the ratio thereof squarely applies to the facts of the present case. The learned Bharat Hiralal Shah 11 ITA No. 729/MUM/2025 ITA 525/2014 has held that fails in carrying out the enquiries which are required in the matter, then the Ld. CIT(A) is under obligation to carry out such enquires and he cannot sit ideal and allow relief to the either of party. The relevant part of decision is reproduced as 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a \"further inquiry\" in exercise of the power . This approach not having been adopted, the impugned order of ITAT, and consequently that of CIT (Appeals), cannot he learned Departmental Representative relied upon e Hon’ble Bombay High Court in Kanak Impex contending that the ratio thereof squarely applies to the facts of the present case. The learned Printed from counselvise.com counsel for the assessee, however, sought to distinguish the said decision by submitting that in documentary evidence in support of the purchases had been filed, whereas in the present case, the assessee has produced all documents such as purchase bills, sales register entries, stock register and proof of payment through banking channels. 6.7 In our considered opinion, the fact whether or not certain documents like purchase bills, sales bills or stock register entries were filed is not, by itself, a determinative factor. The essence of the judgment of the Hon’ble Bombay High Court in (supra) lies in the principle that where the appellate authority has accepted that the bills in dispute are merely paper transactions unsupported by actual delivery of goods, yet the sales are not doubted, it must necessarily follow that the assessee had procured goods from unrecorded sources effecting such sales. In such a case, the source of the goods purchased in cash from the grey market remains unexplained. 6.8 When the assessee fails to adduce cogent evidence of the delivery of goods corresponding to the purchase bills recorded in the books of account, the mere production of documents such as invoices, ledger entries, or stock register details serves little purpose. Absent credible proof of transportation, delivery challans, weighment slips or similar evidence, the so ITA No. 729/MUM/2025 counsel for the assessee, however, sought to distinguish the said decision by submitting that in Kanak Impex documentary evidence in support of the purchases had been filed, whereas in the present case, the assessee has produced all uch as purchase bills, sales register entries, stock register and proof of payment through banking channels. In our considered opinion, the fact whether or not certain documents like purchase bills, sales bills or stock register entries ot, by itself, a determinative factor. The essence of the judgment of the Hon’ble Bombay High Court in (supra) lies in the principle that where the appellate authority has accepted that the bills in dispute are merely paper transactions rted by actual delivery of goods, yet the sales are not doubted, it must necessarily follow that the assessee had procured goods from unrecorded sources—typically from the grey market effecting such sales. In such a case, the source of the goods sed in cash from the grey market remains unexplained. When the assessee fails to adduce cogent evidence of the delivery of goods corresponding to the purchase bills recorded in the books of account, the mere production of documents such as dger entries, or stock register details serves little purpose. Absent credible proof of transportation, delivery challans, weighment slips or similar evidence, the so-called purchase bills Bharat Hiralal Shah 12 ITA No. 729/MUM/2025 counsel for the assessee, however, sought to distinguish the said Kanak Impex (supra), no documentary evidence in support of the purchases had been filed, whereas in the present case, the assessee has produced all uch as purchase bills, sales register entries, stock register and proof of payment through banking channels. In our considered opinion, the fact whether or not certain documents like purchase bills, sales bills or stock register entries ot, by itself, a determinative factor. The essence of the judgment of the Hon’ble Bombay High Court in Kanak Impex (supra) lies in the principle that where the appellate authority has accepted that the bills in dispute are merely paper transactions rted by actual delivery of goods, yet the sales are not doubted, it must necessarily follow that the assessee had procured typically from the grey market—for effecting such sales. In such a case, the source of the goods sed in cash from the grey market remains unexplained. When the assessee fails to adduce cogent evidence of the delivery of goods corresponding to the purchase bills recorded in the books of account, the mere production of documents such as dger entries, or stock register details serves little purpose. Absent credible proof of transportation, delivery challans, called purchase bills Printed from counselvise.com assume the character of mere book entries without corresponding physical movement of goods. 6.9 In light of the foregoing discussion, and applying the ratio of Kanak Impex (supra) to the facts at hand, we are unable to sustain the findings of the lower appellate authority. We accordingly set aside the impugned orders and Assessing Officer for de novo adjudication in accordance with law, after affording due opportunity of hearing to the assessee. The grounds raised by the Revenue are accordingly stand allowed. 7. In the result, the app statistical purposes. Order pronounced in the open Court on Sd/ (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 12/08/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 729/MUM/2025 assume the character of mere book entries without corresponding sical movement of goods. In light of the foregoing discussion, and applying the ratio of (supra) to the facts at hand, we are unable to sustain the findings of the lower appellate authority. We accordingly set aside the impugned orders and restore the matter to the file of the Assessing Officer for de novo adjudication in accordance with law, after affording due opportunity of hearing to the assessee. The grounds raised by the Revenue are accordingly stand allowed. In the result, the appeal of the Revenue is allowed for nounced in the open Court on 12/0 Sd/- Sd/ (SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Bharat Hiralal Shah 13 ITA No. 729/MUM/2025 assume the character of mere book entries without corresponding In light of the foregoing discussion, and applying the ratio of (supra) to the facts at hand, we are unable to sustain the findings of the lower appellate authority. We accordingly set restore the matter to the file of the Assessing Officer for de novo adjudication in accordance with law, after affording due opportunity of hearing to the assessee. The grounds raised by the Revenue are accordingly stand allowed. eal of the Revenue is allowed for /08/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "