K.D.P. INFRASTRUCTURE PRIVATE LIMITED,NOIDA, UTTAR PRADESH V. DCIT, CENTRAL CIRCLE, GHAZIABAD, GHAZIABAD, UTTAR PRADESH

ITA 1094/DEL/2024

AI Insights

The case involves M/s KDP Infrastructure Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) Noida, which had upheld the addition of Rs.4,55,50,000 as bogus purchases under Section 69 of the Income Tax Act, 1961. The additions were initially made following a search and seizure operation and subsequent reopening of the assessment under Sections 147 and 148 of the Act. The Tribunal examined the legality of the additions, focusing on the jurisdictional issues and the application of Section 69, which pertains to unexplained investments. The Tribunal concluded that the additions were not justified as the assessee had maintained verifiable books of accounts and the purchases in question were recorded therein.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791621 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-03-2024
• Other Referred Cases: PCIT (Central)-2 Vs. Param Diary Ltd. [2022] 139 taxmann.com 546 (Delhi), CIT-V Vs. M/s Radhika Creation ITA No. 692/2009, Mandeep Singh Anand V. ACIT [2024] 161 taxmann.co 1225 (Delhi - Tribu.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: AJAY WADHWA
• Keywords: Corroborative evidences; Bogus purchase; Search and seizure; Deemed to accrue or arise in india; Bogus
• Section: 147; 148; 154; 68; 69; 69C

Judgement Text

"P a g e | 1 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.1094/Del/2024 (Assessment Year: 2012-13) M/s KDP Infrastructure Private Limited C-78, Sector 63, Noida Uttar Pradesh – 201301 Vs. DCIT, CC Room No. 229, 2nd Floor, CGO Complex-I, Kamala Nehru Nagar, Hapur Chungi, Ghaziabad Uttar Pradesh- 201002 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAACS1691J Appellant .. Respondent Appellant by : Sh. Ajay Wadhwa, Adv. Sh. Shivam Garg, Adv. Respondent by : Sh. Om Prakash, Sr. DR Date of Hearing 09.12.2025 Date of Pronouncement 12.12.2025 O R D E R PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 23.01.2024 of the Ld. Commissioner of Income Tax(A)-3 Noida (hereinafter Printed from counselvise.com P a g e | 2 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No. CIT(A), Kanpur-4/11054/2019-20 arising out of the appeal before it against the order dated 01.12.2023 u/s 154 r.w.s. 254 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ACIT/DCIT/ACIT, Central Circle, Ghaziabad for Assessment Year 2012-13. 2. Heard and perused the records the Ld. Counsel has primarily question the assumption of jurisdiction alleging that the addition made u/s 69 of the Act is not sustainable for the reason that without rejecting the books of the assessee the bogus purchases for which payment were made from the books addition u/s 69 could not have been made. Reliance was placed by Ld. Counsel on the decision of Hon’ble Allahabad High Court in Sarika Jain and other decisions supported the case are as under: i. PCIT (Central)-2 Vs. Param Diary Ltd. [2022] 139 taxmann.com 546 (Delhi) ii. CIT-V Vs. M/s Radhika Creation ITA No. 692/2009 iii. Mandeep Singh Anand V. ACIT [2024] 161 taxmann.co 1225 (Delhi – Tribu.) 3. It was also contended even about provision of section 69C of the Act would not be maintainable reliance was placed on the decision. Printed from counselvise.com P a g e | 3 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) 3.1 The ld. DR countered the same by submitting that merely quoting on wrong section is not fatal and otherwise the transactions of purchases were found to be bogus. 4. As we appreciate material on record the submissions it comes up that a search and seizure operation was conducted on 29.09.2014 in the premises of assessee comprising KBP/MGI Group of cases and the cases were centralized. Assessment was initiated u/s 153A/143(3) of the Act and addition of Rs.22,88,50,000/- was made on 30.12.2016. Subsequently, information being received in respect of bogus purchases/expenses from the investigation wing, New Delhi on 26.03.2019. The case of the assessee was reopened u/s 147 r.w.s 148 of the Act and assessment was completed by impugned order at a total income of Rs.30.32,32,560/- after making addition on account of bogus purchase of Rs.4,55,50,000/- u/s 69 of the Act. 5. At the out set with regard to the contention of ld. DR that wrong section has been quoted we find that during the proceedings before this Tribunal on 18.09.2025 the letter was written by the AO in regard to some report sought by ld. DR wherein the AO has not mentioned of invoking a wrong section but Printed from counselvise.com P a g e | 4 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) has again asserted that addition was on account of bogus purchases of Rs.4,55,50,000/- u/s 69 of the Act. 6. Then on merits of this issue, we find on perusal of the proforma for obtaining approval u/s 151 of the Act shows that approval was granted for reopening by reliance the reasons for believe as per the annexure attached and annexure attached containing the reasons to believe gives details of the information received and mentions that assessee has given an amount of Rs.4,45,50,000/- through RTGS from Yes Bank during the Financial Year 2011-12, M/s Bhawani Enterprises proprietorship Virender Singh which establishes that the assessee has been made bogus purchases/expenses. 7. At the time of recording of the reasons itself the AO was aware the issue involves alleged bogus purchases for which payment were made by banking transaction and accordingly when the assessment was completed the AO in the para 5 of the assessment order observed that order sheet entry dated 10.09.2019 the assessee was required to submit confirmation of transaction made with M/s Bhawani Enterprises along with supporting evidences and no documentary evidences are submitted that the actual transaction was made with M/s Bhiwani Enterprises. The AO observed that Printed from counselvise.com P a g e | 5 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) since no business activity had ever been done by M/s Bhiwani Enterprises it is clear that M/s Bhiwani Enterprises is an entry provider and thereupon concluded in a para 6 that the expenditure made is against bogus purchases/expenses and ‘that assessee company failed to explain genuineness of purchases’ that were debited to profit and loss account. Therefore, the purchases amounting to Rs.4,55,50,000/- are treated as bogus and disallowed as expenditure us/ 69 of the Income Tax Act, 1961 and added to the income of the assessee. 8. Aforesaid conclusion of the ld. AO in para 5 & 6 leave no doubt in the mind of this Bench that purchases for which payments were made from the books and expenses were debited to profit and loss account were being disallowed as same were found to be not genuine purchases. However, assessee’s books of accounts with regard to its business of real estate, project development and multi storied construction of houses giving rise to revenue from operations has not been doubted. The impugned order of ld. CIT(A) shows that primarily the investigation wing report of M/s Bhiwani Enterprises, bank account transactions and failure of the proprietor to respond became basis to consider the purchases to be bogus. Nothing Printed from counselvise.com P a g e | 6 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) independently was examined and found from books of account of the assessee to allege that purchases were bogus. 9. Now when the ld. AO specifically invokes unexplained deemed income provision forming part of Section 68 to Section 69C of the Act then for every provision so invoked casts a different sort of onus on the assessee and for the purpose of Section 69 of the Act what is material is that explanation sought rests on the fact that in the preceding financial year the assessee had made ‘investments’ which ware not recorded in the books of accounts, however, in the case of alleged bogus purchases there is no case of investments being found held by the assessee but not recorded in books of account. If inventory is considered to be an ‘investment’ then for that there should be some examination of stock to allege and establish discrepancy in stock or inventory, which is not the case here. 10. Then, further onus u/s 69 of the Act on the assessee would be to explain nature and source of investment which in the case in hand admittedly are in the form of purchases made from the books itself. There is no allegation of the source of purchases being outside the books or that books maintained by the assessee lacked veracity to show that the purchases could not have been Printed from counselvise.com P a g e | 7 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) made out of the known sources reflected in the books. Thus section 69 of the Act if invoked needed specific rebuttal and on basis of assertion that merely quoting wrong section does not prejudice the assessee does not help the department. Then ld. AO at some stage should come forward to claim as to how other deeming income provision was attracted. Same is also not the case here. 11. We are inclined to allow ground no. 10 and 11. The appeal is allowed and impugned addition is directed to be deleted. Order pronounced in the open court on 12.12.2025 Sd/- (Amitabh Shukla) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 12.12.2025 Rohit, Sr. PS Printed from counselvise.com P a g e | 8 ITA No.1094/Del/2024 M/s KDP Infrastructure Pvt. Ld. (AY: 2012-13) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "