INCOME TAX OFFICER, WARD 1, SIKAR, SIKAR V. PRADEEP KUMAR AGARWAL, SIKAR

ITA 1544/JPR/2024

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-1, Sikar against Pradeep Kumar Agarwal concerning the assessment year 2021-22. The primary issue was the disallowance of purchases amounting to Rs. 9,60,01,182 made by the assessee from three suppliers, which the AO deemed non-genuine. The CIT(A) reversed the AO's decision, leading to the revenue's appeal to the Tribunal. The Tribunal examined the evidences presented, including purchase bills, transport vouchers, GST returns, and the historical trading patterns of the suppliers, and found them to be credible and consistent with genuine business transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35448 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Other Referred Cases: PCIT vs. Kanak Impex (India) Ltd., PCIT Vs. Tejua Rohitkumar Kapadia
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANWAR SINGH RATNU; HOLDING
• Assessee Lawyers: P.C. PARWAL
• Keywords: Reassessment proceedings; Unexplained expenditure; Bogus purchase; Onus to prove; Accommodation entries; Bogus
• Section: 143(3); 250; 192; 133(6); 13

Judgement Text

"vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh]U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1544/JPR/2024 fu/kZkj.k o\"kZ@Assessment Year : 2021-22. Income Tax Offixcer, Ward-1, Sikar. cuke Vs. Pradeep Kumar Agarwal, S/o Shri Shyam Sundar Agarwal, Upbhokta Bhandar Ke Pass, Bajaj Road, Sikar. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGEPA6691D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri P.C. Parwal, C.A. jktLo dh vksj ls@Revenue by : Shri Bhanwar Singh Ratnu, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 05/03/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 04/04/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the revenue against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC) Delhi dated 16.10.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2021-22. The Revenue has raised the following grounds of appeal :- 1. The ld. CIT (A) has erred on facts and in law in deleting the disallowance of Rs. 9,60,01,182/- by treating the purchases made by the assessee from Shri Parshottam Agarwal, Jagdamba Enterprises and Smt. Parwati Agarwal as genuine whereas the Assessing Officer treated these purchases as non-genuine. 2. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 2. The brief facts of the case are that the assesseeis engaged in the business of trading of mustard oil cake and groundnut oil cake in its proprietary concern M/s Shiv Enterprises. He filed his return of income on 11.03.2022 declaring total income of Rs.15,34,520/- (PB 40-43). The AO observed that assessee has made substantial purchases from three suppliers i.e. Sh. Parshottam Agarwal (M/s Jagdamba Traders), Jagdamba Enterprises and Smt. Parwati Agarwal (M/s ParwatiCottex and Oil Industries)who have not filed ITR for the relevant year under consideration and have made large sales transaction with the assessee.In response to notice issued notice u/s 133(6) on 09.11.2022 no reply has been received from these parties. Accordingly, AO vide show cause notice required the assessee to explain why the total purchases of Rs.9,60,01,182/- should not be considered as unexplained expenditure and added back to the income of assessee. In response to the same, assessee vide letter dated 14.12.2022 filed audit report, balance sheet, bank account statements, GST returns, purchase invoice along with e-way bills, ledgers, and transportation bills by various transporters to prove the purchases and also filed justification of the same. The AO, however, observed that:- a) Complete address of the purchase parties is not provided on the transport vouchers and tax invoices. b) Complete address of transporters is not provided on transport vouchers and GST/PAN/contact number/stamp or seal of the transporter company etc. are not available on the voucher. The layout of all the transport vouchers of different transport companies w.r.t. to the specific 3 purchases parties are similar. The hand writing on all these transport vouchers of different transport companies appear same (of a single person). Same vehicle number has been used by multiple transport company on many occasions. Many vehicles mentioned in the transport voucher are non-existing or non- commercial vehicle. Thus the bills/ vouchers are not genuine and cannot be relied upon and also the transport vouchers produced by the assessee seem to be fabricated and prepared later to provide as a proof 3 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. of the transactions which have not taken place. The various documents filed by the assessee can’t be relied upon and lacks genuineness. He also relied upon the various cases and thus disallowed the total purchase of Rs.9,60,01,182/- made from these three parties. Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT (A). Before Ld. CIT(A), the assessee filed detailed submission along with the evidences. The Ld. CIT(A) after considering the same held that assessee has been able to discharge his burden to prove the purchases made from these three parties.Accordingly he deleted the addition made by the AO. It also accepted the alternate contention of assessee that once the purchases are not verifiable, the best course of action is to reject the books of accounts and apply the g.p. rate based on the past history. Since the g.p. and n.p. rate for the year is better than last year, therefore, on this account also no addition is justified. Being aggrieved, the revenue has filed the present appeal before the Tribunal. 3. Before us, the ld. D/R supported the order of the AO by placing reliance on the order of the Hon’ble Bombay High Court in the case of PCIT vs. Kanak Impex (India) Ltd. in Income Tax Appeal No. 791 of 2021. 4. On the other hand, the ld. A/R of the assessee reiterated the submissions as were made before the ld. CIT (A). The ld. A/R further submitted his written submissions as under : “ 1. The assessee is maintaining day to day books of accounts. The books of accountisduly audited u/s 44AB. The same is also supported by the stock item register (PB 51-62)maintained on day to day basis. The purchase and sales made by the assessee are duly supported by the bills and vouchers. The AO accepted the books of accounts except purchases made from the three parties namely Jagdamba Enterprises, Jagdamba Traders and ParwatiCottex& Oil Industries. The corresponding sales made out of these purchases have been accepted by the AO. 4 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 2. In assessment proceeding, in respect of the purchases made from all the three parties, the assessee has filed the following evidences:- (i) Copy of purchase bills along with transport builty and E-way bills of goods purchased(PB 63-243) (ii) Copy of GST returns (GSTR-2A and GSTR3B) (iii) Ledger account and confirmation of the party along with the bank statement indicating payment by cheque(PB 244-306) (iv) Stock register indicating the receipt of goods and thereafter sold All these documents clearly proves that the assessee has made the purchases, goods has been received through transport and the same are either uploaded at the assessee’s godown or sold directly to the third party. The purchase rate is also comparable from the purchase rate of other suppliers as evident from the following table:- Date Particulars Qty Value Rate Date Particulars Qty Value Rate 31.07.2020 Jagdamba Traders 97.50 193537.50 1985 31.07.2020 RohitUdhyog 97.50 192562.5 1975 23.07.2020 Jagdamba Traders 96 200736 2091 24.07.2020 Sai Baba Trading Company 202.4 451352 2230 26.07.2020 Jagdamba Traders 96 204960 2135 26.07.2020 Sai Baba Trading Company 200.75 457710 2280 01.10.2020 Jagdamba Traders 248.30 545018.5 2195 01.10.2020 Kailash Industries Dausa 184 401304 2181 04.10.2020 Jagdamba Traders 208.65 460699.2 2208 04.10.2020 Falak Enterprises 211.25 467073.75 2211 05.10.2020 Jagdamba Traders 191.75 423959.25 2211 05.10.2020 Shri Jagdamba Industries 249.6 554361.6 2211 06.10.2020 Jagdamba Traders 247.80 547885.8 2211 06.10.2020 Shri Jagdamba Industries 250.2 555694.2 2221 07.10.2020 Jagdamba Traders 90.00 198990 2211 07.10.2020 Falak Enterprises 91 202111 2221 12.10.2`020 ParwatiCottex and Oil industries 178.75 404153.75 2261 12.10.2020 Sai Baba Trading Company 96 219936 2291 14.10.2020 ParwatiCottex and Oil industries 97.50 224737.5 2305 14.10.2020 Sai Baba Trading Company 192 452736 2358 5 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 02.01.2021 Jagdamba Traders 65.00 168415 2591 02.01.2021 Falak Enterprises 91 236145 2595 04.01.2021 Jagdamba Traders 104.00 281320 2705 04.01.2021 Falak Enterprises 48.75 131673.8 2701 05.01.2021 ParwatiCottex and Oil industries 99.00 269379 2721 05.01.2021 Falak Enterprises 91 245790 2701 07.01.2021 Jagdamba Traders 96.00 254496 2651 07.01.2021 Falak Enterprises 97.5 259447.5 2661 09.01.2021 Jagdamba Traders 96.00 255840 2665 09.01.2021 Khandelwal Traders 252 685440 2720 09.01.2021 Jagdamba enterprises 105.00 279825 2665 09.01.2021 Khandelwal Traders 259 694120 2680 11.01.2021 Jagdamba enterprises 104.00 271440 2610 11.01.2021 Khandelwal Traders 245 661500 2700 21.01.2021 Jagdamba enterprises 29.70 77962.5 2625 21.01.2021 Shree Sai Enterprises 260 663000 2550 02.02.2021 ParwatiCottex and Oil industries 98.00 257838 2631 02.02.2021 Falak Enterprises 97.5 254962.5 2615 17.03.2021 ParwatiCottex and Oil industries 97.50 231172.5 2371 18.03.2021 Falak Enterprises 258.7 582333.7 2251 From the above table, it is clear that the rate of most of the purchase transactions from these three parties is comparable to the rate of purchases made from other parties. Thus the purchases made by the assessee from all these parties are fully verifiable. For this purpose reliance is placed on the decision of Hon’ble Supreme Court in case of PCIT Vs. TejuaRohitkumar Kapadia (2018) 256 Taxman 213 wherein SC upheld the order of Gujarat High Court and dismissed the special leave petition filed by the department. In this case, Hon’ble High Court of Gujarat dismissed the appeal filed by the revenue by holding that purchases cannot be treated as bogus if (a) they are duly supported by bills, (b) all payments are made by account payee cheques, (c) the supplier has confirmed the transactions, (d) there is no evidence to show that the purchase consideration has come back to the assessee in cash, (e) the sales out of purchases have been accepted & (f) the supplier has accounted for the purchases made by the assessee and paid taxes thereon. The assessee has also relied on various cases as referred at PB 4-7 where also similar law was laid down. 3. So far as specific observation of the AO is concerned, it is to submit as under:- 6 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. (i) The purchase bill of the suppliers (PB 63-243) contains complete address. The address of these suppliers as per bill is as under:- Name of suppliers Complete Address Jagdamba Enterprises Station Road, New Mandi Bharatpur (Raj.)-321001 Jagdamba Traders Station Road, New Mandi Bharatpur (Raj.)-321001 ParwatiCottex& Oil Industries Plot no-99B,99C,100A,Old Industrial Area Bharatpur (Raj.)-321001 Thus the observation of AO that purchase bill do not contain the complete address of the supplier is factually incorrect. (ii) There is no defect in the builty of the transporter as alleged by the AO. It may be noted that assessee purchases the goods on ‘FOR delivery’ basis where the transportation charges are paid by the suppliers. This fact is mentioned on the builty itself. The transporter is arranged by the suppliers. From the sample copy of the transport builty placed at PB 63-243, it may be noted that in the builty address of the transporter is mentioned. In the builty, complete details of the seller of the goods, purchaser of the goods and the vehicle number is mentioned. The vehicle details are also mentioned on the E-way bill generated in respect of these purchases. It is a fact on record that transport agency are supplying the goods by arranging the truck/trolley from the market and therefore it is possible that one truck/trolley used by one transport company is also used by other transport company but at different point of time. Simply because the transporter’s GST/PAN/contact number/stamp or seal of the transporter company are not available on builty does not make the purchase as non-genuine especially when the same is supported by the other evidences. There is no basis with the AO to allege that the vehicle number mentioned on the builty are non-existing or non-commercial vehicle ignoring that E-way bill can’t be generated if the vehicle is not existing. Hence on the basis of the alleged defect in the transportation details, the purchases made by the assessee can’t be treated as bogus. (iii) So far as same handwriting in the builty is concerned, it is submitted that all the three suppliers are family concerns as evident from the following table:- 7 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. Name of the firm Status Remarks Jagdamba Enterprises Partnership firm Partners are family members of the supplier ParwatiCottex and Oil Industries Proprietary concern Proprietor is Parwati Agarwal – wife of Purshottam Agarwal Jagdamba Traders Proprietary concern Proprietor is Purshottam Agarwal The accountant of all the three firms was same. It is a general practice in the market that transport builty is made by the person of the supplier and therefore the hand writing in all the builty is similar. Hence for this reason the purchases made from these parties can’t be treated as non-verifiable. (iv) The assessee has been regularly making purchases from these suppliers in the past. Copy of ledger account of these suppliers for AY 2020-21 along with copy of relevant page of bank account indicating payments for purchases made through banking channel is at PB 244-306. These suppliers are registered under the GST Act and filed returns till the year under consideration. Copy of GST details of three suppliers is at PB 307-315. Because of the losses and the cases filed against these parties u/s 138 of the Negotiable Instrumentation Act, they have absconded. Copy of one of such notice is at PB 316-317 and therefore only because they have not responded to the notice issued u/s 133(6) of the Act, no adverse inference can be drawn in this regard. (v) From the E-way bill it can be noted that in most of the cases the goods has been dispatched to the assessee from the mill from whom these suppliers made the purchases. Thus even the source of purchase of the supplier is transparent. Statement prepared from E-way bill indicating the sourcing of the purchase is at PB 318-324which itself proves the genuineness of the purchases. 4. We may further point out that the purchases made from these parties are subsequently sold to various parties. These sales are directly linked to the purchases. The department has accepted the sales declared by assessee. There cannot be any sales without purchases. Thus when the sales are accepted, the disallowance of purchase is unjustified. 8 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 5. It is also submitted that during the year under consideration, all the three suppliers have filed GSTR-1 which is reflected in Table 8A of GSTR 9 return of assessee (PB 367-379). This also proves that the purchases are genuine. 6. The supplier in most of the purchases also gets the weight through Dharmkanta. Copy of few Dharamkanta slips in respect of weighment carried out by the suppliers is at PB 325-340. This also proves that goods are actually purchased by the assessee. Besides this, in some of the cases assessee also gets the weight at its station. Copy of few DharmkantaParchi in respect of weighmentcarried out by the assessee is at PB 341-353. 7. Similar purchases from two of the above parties were made by assessee’s group concern NagarmalKanhaiyalal in the year under consideration wherein also the assessment was made u/s 143(3)(PB 354-359). In this case the matter was referred to Verification Unit to examine the four sellers i.e. M/s ParwatiCottex Oil Industries, M/s Jagdamba Traders, M/s SJI EXIM and M/s Khandelwal Industries to verify whether the purchases made by it is genuine. This firm furnished all the documentary evidences i.e. ledger account of suppliers, purchase invoices, E-way bills, builties, stock records, bank statement showing payment to suppliers, GST returns and contended that if the suppliers were not filling returns of income, it does not mean that business transactions made by it with the parties are suspicious and non-genuine. The AO after considering the various evidences accepted the purchasesmade from these parties as genuine by holding as under:- “6. It is observed from the ledger extracts and tax invoices there is a bulk purchases periodically and supported by periodical payments through banking channels which suffered GST. 7. It is observed that the assessee firm has admitted a gross profit on mustard trade at 1.47% which is in excess of industry average of 1.25%. 9. Since, the CASS reason for selection of scrutiny was verified with respect to purchases regarding purchases from four suppliers who have not filed their returns of income and subject to the above, assessment is completed u/s 143(3) of the Income Tax Act, 1961 accepting income returned.” Thus when the department itself is accepting the purchase in assessee’s sister concern as genuine, the action taken in the hands of the assessee by treating the same as non- genuine is unjustified. 8. The assessee has filed a detailed affidavit explaining the facts about purchases made from these three parties (PB 360-366). These parties were purchasing the goods from local mills and 9 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. selling it to assessee. Due to heavy losses in the business, these parties closed their business and left Bharatpur. Cheques issued by them to various mill owners were dishonoured. The mill owners have filed case against them. Copy of the order sheet of court case filed against one of the supplier Purshottam Agarwal, Prop. OfJagdamba Traders along with the copy of petition is at PB 19-31. As per this petition Jagdamba Traders was engaged in the business of Khal since long time and his cheques were dishonored. This also proves that the above parties were engaged in the business and not simply name lender. Hence the purchases made by the assessee from it can’t be treated as non- genuine. 9. Without prejudice to above, even if it is assumed that the purchases are not verifiable, then also the entire purchases can’t be disallowed. The income has to be estimated by applying the best judgement. Therefore what can be added to the income is estimating the income by applying the appropriate gross profit considering the past history. The position of the gross profit and net profit rate for the current year and last three years are tabulated as under:- From the above table it can be noted that during the year GP rate is 1.048% and NP rate is 1.05% which is comparable with the earlier years. Various courts in various cases have held that where the purchases are treated as non genuine, then in such cases the gross profit rate shall be applied and the disallowance shall be made to the extent of shortfall in the gross profit rate. The Ld. CIT(A) has also held that the g.p. &n.p. rate for the year is better than the last year and therefore on this account also, no addition is justified. This finding of Ld. CIT(A) is not challenged by the department and therefore also, the ground taken by the department becomes infructuous. In view of above, Ld. CIT(A) has rightly deleted the addition and therefore the appeal filed by the department be dismissed.” AY Turnover G.P. Rate N.P. Rate 2021-22 14,69,74,688 1.048 1.05 2020-21 13,48,69,285 1.00 1.03 2019-20 7,44,29,534 1.53 1.00 2018-19 4,97,87,979 1.49 0.86 10 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 5. We have heard the rival submissions, perused the material on record, gone through the orders of the revenue authorities and the case laws relied on by both the sides.We note that the AO disallowed the entire purchases of Rs.9,60,01,182/- for the reason that assessee could not get verified the purchases made from M/s Jagdamba Traders(Prop. Shri Purshottam Agarwal), Jagdamba Enterprises and M/s Parwati Cottex and Oil Industries(Prop. Smt. Parwati Agarwal). The Ld. CIT(A) deleted the addition by giving following findings at para 8.1 to 8.4 of the order. “8.1 I find that the appellant is maintaining day-to-day books of accounts along with stock register. The appellant during the course of assessment proceeding as well as in appellate proceedings in respect of purchases made from all the three parties has filed the following documents:- (i) Purchase bill, (ii)Transport bilty, (iii) E-way bills, (iv) GST returns (GSTR-2A and GSTR3B). (v) ledger account (vi) Confirmation of the party, (vii) bank statement indicating payment by cheque (viii) Stock register indicating the receipt of the goods and thereafter sold. The AO has not found any defect therein. Further, it is noted that the payments made by the appellant to these suppliers are in cheque. In appellate proceedings the appellant has also filed an affidavit affirming the fact that the purchases from these parties are genuine. The appellant has submitted these parties (Sh. Parshottam Agarwal, Jagdamba Enterprises and Smt. Parwati Agarwal) have run into heavy losses and to avoid the payments to the creditors, they have left the said premises and are absconding. He has also filed copies of the case filed by the parties against these suppliers for dishonoring cheques against the supply of the goods to them. Thus, this 11 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. explains the reasons for not finding the parties at the given address. The various observations made by the AO in respect of bills and bilty are found to be general and factually incorrect. I have gone through the purchase bill and noted that in the purchase bill of the suppliers, complete address is mentioned as Jagdamba Enterprises, Station Road, New Mandi, Bharatpur (Raj.)-321001, Jagdamba Traders, Station Road, New Mandi, Bharatpur (Raj.)-321001 & Parwati Cottex & Oil Industries Plot no-998,99C, 100A, Old Industrial Area, Bharatpur (Raj.)-32100 trawich is a complete address. Similarly, it is found that on the bilty name of the transporter is mentioned as \"Dev Transport Company, Transport Nagar, Bharatpur\", Ganesh Transport Company Transport Nagar, Bharatpur\" etc. This is the complete address of the transport company. In the bilty, complete details of the seller of the goods, purchaser of the goods and the vehicle number is mentioned. The vehicle details are also mentioned on the E-way bill generated in respect of these purchases. 8.2 The claim of genuineness of the purchases is also proved by the appellant by filing the evidence that:- a. During the year under consideration, all the three suppliers have filed GSTR-1. As a result of this, such sales are reflected in GSTR-2A of assessee. This also proves that the purchase is genuine. b. The supplier in most of the purchases also gets the weight through Dharm kanta and the appellant has filed copies of the few Dharam Kanta slips in respect of purchases made from Parwati Cottex & Oil Industries and Jagdamba Traders. This proves that goods are actually purchased by the appellant. Besides this, in some of the cases appellant, also gets the weight at its station. c. It is also noted that similar purchases from two of the above parties were made by appellant's group concern Nagarmal Kanhaiyalal in the year under consideration wherein also the assessment was made u/s 143(3). In this case the matter was referred to Verification Unit to examine the four sellers i.e. M/s Parwati Cottex Oil Industries, Jagdamba Traders, M/s SJI EXIM, M/s Khandelwal industries to verify whether the purchases made by the assessee firm are genuine. Assessee firm has furnished all the documentary evidences i.e., ledger account of suppliers, purchase 12 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. invoices, E-way bills, bilities, stock records, bank statement showing payment to suppliers, GST returns. The assessee contended that the suppliers were not filling returns of income does not mean that business transactions made by the assessee firm with the parties are suspicious and non-genuine. The AO, however after considering the various evidences accepted the purchase made by these parties as genuine by holding as under:- \"6. It is observed from the ledger extracts and tax invoices there is a bulk purchase periodically and supported by periodical payments through banking channels which suffered GST. 7. It is observed that the assessee firm has admitted a gross profit on mustard trade at 1.47%, which is in excess of industry average of 1.25%. 9. Since, the CASS reason for selection of scrutiny was verified with respect to purchases regarding purchases from four suppliers who have not filed their returns of income and subject to the above, assessment is completed u/s 143(3) of the Income Tax Act, 1961 accepting income returned.\" 8.3 On perusal of all the above evidences, I note that the appellant has been able to prove the purchases. The appellant has also filed the comparable table of purchases made from these parties and other parties. As per the table it is noted that the purchase rates from these parties are comparable with purchases made from other parties. The transporter's GST/PAN/Contact number/Stamp or Seal of the transporter company are not available on bilty does not make the purchase as non- genuine specially when the same is supported by the other evidences. There is no basis for the Ld AO to allege that the vehicle number mentioned on the bilty are non- existing or non-commercial vehicle. The explanation with reference to the same handwriting on the same bilty is found acceptable as per the trade practices of making the bilty. It is further noted that the decision of the Supreme court in case of PCIT vs. Tejua Rohitkumar Kapadia (2018) 256 Taxmann 213 also support the case of the assessee wherein SC upheld the order of Gujarat High Court and dismissed the special leave petition filed by the department. In this case, Hon'ble High Court of Gujarat 691/2017 dismissed the appeal filed by the revenue by holding that purchases cannot be treated as bogus if (a) they are duly supported by bills, (b) all 13 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. payments are made by account payee cheques, (c) the supplier has confirmed the transactions, (d) there is no evidence to show that the purchase consideration has come back to the assessee in cash, (e) the sales out of purchases have been accepted & (f) the supplier has accounted for the purchases made by the assessee and paid taxes thereon. Similarly, the various other cases filed by the appellant also support his case. As against this the facts of the cases referred by the AO are not applicable. 8.4 I also find force in the alternate argument of Ld AR that once the purchases are not verifiable, the best course of action is to reject the books of accounts and apply the G.P rate based on the past history. I note that the GP and NP rate for the year is better than last year. Therefore, on this account also no addition is justified.” During the course of hearing, Ld. D/R relied on the decision of Hon’ble Bombay High Court in case of PCIT vs Kanak Impex India Ltd. order dated 03.03.2025 where it confirmed the addition made by AO on account of bogus purchases of Rs.20,06,80,150/- for the reason that assessee failed to prove genuineness of the purchases, the case was reopened on the ground that purchases made by the assessee are from hawala operator, the assessee choose not to attend the reassessment proceedings, the assessee having consciously and intentionally decided not to join the investigation, he cannot now contend that revenue should have given them all the details before making the addition and the decisions relied on by the Ld. Counsel of the respondent assessee are distinguishable on the facts. However, the facts of the present case is entirely different in as much as the revenue has not brought any evidence on record that purchase made from these parties are bogus or hawala transactions or accommodation entries. Assessee has brought on record the fact that these concerns run into heavy losses and to avoid the payment to the creditors, they have left their premises and are absconding for which copy of the case filed by these parties against these suppliers for dishonoring the cheques against the supply of goods to 14 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. them was filed. The assessee has also linked the purchases made from these parties with the corresponding sales and the GP rate and NP rate declared by the assessee during the year is comparable with earlier years. In fact, the Ld. CIT(A) at para 4 of his order, considering these facts has also held that addition is not justified. This finding of Ld. CIT(A) is not challenged by the revenue. The Ld. AR of the assessee has placed on record the decision of ITAT Mumbai Bench in case of Suresh Kishinchand Changwani vs DCIT (2025) 210 ITD 669 where addition of Rs.3,71,36,606/- for alleged non genuine purchases made from 10 parties was deleted by holding that assessee has placed on record all the corroborative documentary material to establish the genuineness of the purchases, mapping them to the export sale made by him, revenue has accepted the purchases made from the same parties in the subsequent years and therefore merely because the suppliers did not appear before the Ld. AO or Ld. CIT(A), it cannot be concluded that the purchases were not made by the assessee. We therefore uphold the detailed finding recorded by ld. CIT(A), supra, and dismiss the ground of the revenue. 6. In result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 04 /04/2025. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (Rathod Kamlesh Jayantbhai) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 04/04/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 15 ITA No. 1544/JPR/2024 Pradeep Kumar Agarwal, Sikar. 1. vihykFkhZ@The Appellant- ITO, Ward-1, Sikar. 2. izR;FkhZ@ The Respondent- Pradeep Kumar Agarwal, Sikar. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 1544/JPR/2024} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar "