ITO 41(1)(3), MUMBAI, MUMBAI V. PARVEZ AHMED KHALKULLAH CHOUDHARY, MUMBAI

ITA 497/MUM/2025

AI Insights

The case involves an appeal by the Income Tax Officer (ITO) against the order of the CIT(A), which had granted relief to the assessee, Parvez Ahmed Khalkullah Choudhary, for the assessment year 2022-23. The revenue challenged the deletions made by the CIT(A) regarding additions related to purchases from two parties and unsecured loans, as well as the disallowance of a GST penalty. The Tribunal noted that the CIT(A) had not verified the documents or called for a remand report, leading to the decision to remit the issues back to the AO for thorough examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473846 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: misc
• Other Referred Cases: ITA no. 1128& 1249/MUM/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TEJVEER SINGH
• Assessee Lawyers: R.A. DHYANI
• Keywords: Additional evidence; Bogus purchase; TDS; Bogus
• Section: 143(3); 143(2); 68; 69C; 139; 234B; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI GIRISH AGRAWAL (ACCOUNTANT MEMBER) I.T.A. No. 497/Mum/2025 Assessment Year: 2022-23 ITO 41(1)(3), Mumbai Room No. 830B, Kautilya Bhavan, BKC, Bandra East Maharastra-400051 Vs. Parvez Ahmed Khalkullah Choudhary C/410 C-Wing, IVY Homes CTS 750 Others, Vilage Ward Kurla (West) Maharashtra-400070 PAN: CIZPK9479G (Appellant) (Respondent) Appellant by Shri Tejveer Singh Respondent by Mr. R. A. Dhyani, CIT DR Date of Hearing 05.03.2025 Date of Pronouncement 26.03.2025 ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the revenue arises out of order dated 25/11/2024 passed by NFAC, Delhi, for assessment year 2022-23 on following grounds of appeal : 2 ITA No.497/Mum/2025; A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary “1. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition relating to purchase from 2 parties namely Jivgiri Narbhegiri Goswami (PAN: AORPG1526N) and Sachin Patil (PAN: GCOPP3847L) for amounts Rs.93,97,740/- and Rs.4,66,11,795/- respectively in absence of submission of PAN wise data by the assessee to establish that no purchases have been made from the said parties. 2. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting addition related to unsecured loans taken from Om Metal and Sattar Enterprises, totalling Rs.57,60,233/- despite failure of the assessee to discharge this onus of establishing creditworthiness and genuineness of transactions under question. 3. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance of GST penalty despite the expense being penal in nature and hence not allowable u/s 37(1) of the Act. 4. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred under rule 46A in considerting additional evidence filed during the appellate proceeding regarding GST penalty expense claimed, the details of which, as stayed by the AO in his assessment order was not furnished during the assessment proceeding. 5. The appellant craves leave to add, amend, alter substitute or modify any of the above grounds or add a fresh ground as and when found necessary either before or at the time of hearing.” Brief facts of the case are as under: 2. The assessee is an individual and for year under consideration had filed its return of income declaring total income at Rs.1,97,75,080/-. The case was picked up for scrutiny and notice u/s. 143(2) was issued to the assessee regarding following issues: “1. Business purchases 2. Details of assets and liabilities 3. High creditors/liabilities 3 ITA No.497/Mum/2025; A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 4. Default in TDS and such disallowance. ” 2.1 The assessee during the assessment proceedings did not furnish complete details in respect of the issues that was raised during the assessment proceedings except for details pertaining to GST penalty. Accordingly, addition was made by the Ld.AO in respect of all the issues raised therein. S.No. Description Amount (in INR) 1. Income Tax Return filed by assessee u/s 139 of the Act. Rs.1,91,75,080/ 2. Addition on account of disallowance of GST Penalty Rs. 7,41,150/- 3. Addition on account of GST on Bogus purchase Rs. 21,16,67,237/- 7. Addition on account of unsecured loan u/s 68 r.w.s 115BE of the Act Rs.7,89,86,241/- 8. Addition on account of sundry creditors u/s 68 r.w.s 115BE of the Act Rs.83,93,450/- 9. Total income determined Rs. 31,89,63,158/ 6. Assessed u/s 143(3) read with section 144B of the Act at total income of Rs. 31,89,63,158/-. Interest u/s 234A, 234B and 234C is charged accordingly. Penalty 271AAC(1) of the Act is being initiated for addition on account of 68 & 69C r.w.s 115BE of the Act and Penalty 270A of the Act is being initiated for disallowance of expenses. Issued demand notice and challan.” 2.2 Aggrieved by the order of the Ld.AO assessee filed appeal before the Ld. CIT(A). 3. The Ld. CIT(A) after considering the submissions of the assessee and additional evidence filed by the assessee granted part relief. Aggrieved by the order of the Ld.CIT(A) revenue is in appeal before this Tribunal. 4 ITA No.497/Mum/2025; A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 3.1 The Ld.DR submitted that in respect of the purchases made by the assessee during the year the assessee did not file any details pertaining to two parties being Jivgiri Narabhegiri Goswami and Sachin Patil. 3.2 The Ld.DR submitted that, without verifying establishing genuineness, creditworthiness of the transaction the addition was erroneously deleted only based on the submissions filed by the assessee. The Ld.DR further submitted that, in respect of unsecured loan taken from Om Metal and Sattar Enterprises totalling to 57,60,233/-, the assessee did not discharge its onus by filling details to establish creditworthiness and gennuiness of the transaction. The Ld.DR submitted that, the assessee treated GST penalty as an expenditure which is not allowable as per the proviso section 37(1) of the Act. It is thus submitted that, all the above additions stood deleted in the hands of the assessee based on the additional evidences filed during the assessment proceedings. 3.3 The Ld.DR submitted that, merely based on submissions of the assessee this additions stood deleted. He thus prayed for the issues to be remanded back for necessary verification before the Ld.AO. 3.4 On the contrary the Ld.AR submitted that all these details were furnished before this first appellate authority which was considered and appropriate relief was granted. The Ld.AR placed reliance on the orders of this Tribunal in assessee’s own case wherein similar additions were deleted. We have perused the submissions advance by both sides in the lights of records placed before us. 5 ITA No.497/Mum/2025; A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 4. The Ld.AR at the time of hearing submitted that purchases were disallowed u/s.69C of the Act, from two parties. It is submitted that, identical issue was considered by coordinate bench of this Tribunal in assessment year 2020-21 in ITA no. 1128& 1249/MUM/2024 dated 22/07/2024 wherein the additions stood deleted. In respect of the unsecured loans from the two parties totalling to Rs.57,62,233/-. It is however noted that though the assessee provided documentary evidences before the Ld. CIT(A) for which no further was verification carried out in order to ascertain the correctness of the those documents. 4.1 In respect of the payment made as GST penalty assessee has furnished evidences in support stating that this were not in the nature of penalty which is also been relied before us in the paper book page no. 163-165. 4.2 In our considered opinion all the above issues require to be verified in detail having regard to the evidences furnished by the assessee in accordance with law. It is noted that the Ld. CIT(A) did not verify the details either himself or called for a remand report. In the interest of justice we remit all these issues back to the Ld.AO for carrying out necessary verification. Needless to say that proper opportunity has been granted to the assessee. In the result appeal filed by the revenue stand partly allowed as indicated here in above. Order pronounced in the open court on 26/03/2025 Sd/- Sd/- (GIRISH AGRAWAL) (BEENA PILLAI) Accountant Member Judicial Member 6 ITA No.497/Mum/2025; A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary Mumbai: Dated: 26/03/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai "