M/S. K.R. TRADELINK PRIVATE LIMITED. ,HOWRAH V. NE-AC, DELHI. , DELHI.

ITA 927/KOL/2023

AI Insights

The case involves M/s. K. R. Tradelink Private Limited, which appealed against the order of the CIT(A), NFAC, Delhi, dated 04.08.2023, for the assessment year 2018-19. The appeal was against the confirmation of an addition of Rs.5,09,12,631 as disallowance of total purchases, initially made by the Assessing Officer (AO) under sections 143(3) read with 144B of the Income Tax Act, 1961. The AO had treated the entire purchases as bogus based on a survey and statements from an accommodation entry operator. The CIT(A) upheld the AO's decision due to the assessee's non-cooperation. The Tribunal found that the assessee was not given a fair opportunity to present its case and thus restored the matter to the CIT(A) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25426 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H. ROBINDRA SINGH
• Assessee Lawyers: ABHISEK BANSAL
• Keywords: Bogus purchase; Accommodation entries; Bogus
• Section: 143(3); 133A; 145(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM& Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 927/Kol/2023 Assessment Year: 2018-19 M/s. K. R. Tradelink Private Limited C/o Lata Behani, 7, Ganpat Bagla Road, Block-C, 5th, Room No. 513, Kolkata- 700007. (PAN: AADCK5521A) Vs. Assessing Officer, National e-Assessment Centre, Delhi Appellant Respondent Date of conclusion of Hearing 21.11.2024 Date of Pronouncement 05.02.2024 For the Appellant Shri Abhisek Bansal, Advocate, Advocate For the Respondent Shri H. Robindra Singh, Addl. CIT, DR ORDER Per Shri Rajesh Kumar, AM This appeal filed by the assessee is against the order of Ld. CIT(A), NFAC, Delhi dated 04.08.2023 for AY 2018-19 arising out of assessment order passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) AO, e-Assessment Centre, Delhi dated 30.04.2021. 2. The only issue raised in various grounds of appeal is against the confirmation of addition of Rs.5,09,12,631/- by Ld. CIT(A) as made by the AO on account of disallowance of total purchases. 3. The facts in brief are that the assessee filed its return of income on 20.10.2018 declaring total income of Rs.5,94,788/-. The case of the assessee was selected for manual scrutiny after a survey was conducted u/s. 133A of the Act on 12.01.2018. During the course of survey proceedings, it was noticed by the survey team that the company has made bogus purchases. Accordingly, statutory notices were served on the assessee along with questionnaire. The assessee replied the show cause notice dated 15.04.2021 by written 2 ITA No. 927/Kol/2023 K. R. Tradelink Pvt. Ltd. AY 2018-19 submission dated 22.04.2021. Thereafter, again another show cause notice was issued to the assessee, which was remained uncompiled and finally, the AO treated the entire purchases as bogus and non genuine. The AO also rejected the books of account by invoking the provisions of section 145(3) of the Act on the basis of statement of Shri Manoj Remeka, who was the accommodation entry operator engaged in providing bogus bills and accordingly, the entire purchases were added to the income of the assessee in the assessment order framed u/s. 143(3) r.w.s. 144B of the Act dated 30.04.2021. 4. In the appellate proceedings, Ld. CIT(A) also uphold the assessment framed by the AO when the assessee failed to appear on various dates of hearing fixed by the appellate authority. 5. The Ld. AR submitted before us that the AO has merely on the basis of statement of Shri Manoj Remeka and Mr. Sanjib Kr. Behani taken during the course of survey proceedings u/s. 133A of the Act made the addition by disallowing entire purchases by treating the same as bogus purchases after invoking the provisions of section 145(3) of the Act thereby rejecting the books of account of the assessee. The Ld. AR submitted that all the documents filed by the AO. The Ld. AR submitted that if the assessee is found to be beneficiary of accommodation entries in the form of bogus purchases even then the entire purchase cannot be disallowed and added to the income as the books of account are duly audited by the Chartered Accountant and all the records such as stock registers, sales registers were duly supported with the bills, vouchers, invoices etc. recording therein the quantities received, issued and sale bill nos. etc. However, the AO has not examined any of these documents and straightway disallowed the entire purchases. 6. The Ld. DR, on the other hand, relied on the order of the Ld. CIT(A) by submitting that the assessee was not cooperative before the AO as well as before the Ld. CIT(A), therefore, the Ld. CIT(A) has no other alternative but to uphold the order of the AO wherein the entire purchases were added. 3 ITA No. 927/Kol/2023 K. R. Tradelink Pvt. Ltd. AY 2018-19 7. After hearing the rival contentions and perusing the material on record, we find that the assessee is engaged in the business of trading in goods. A survey u/s. 133A of the Act was conducted on 12.01.2018 on the assessee and the survey team found that the assessee was involved in taking bogus accommodation entries in the form of bogus purchases from four parties namely, M/s. Riddhi Siddhi Enterprises, M/s. Bhagwati Traders, M/s. Shree Shyam Trading Co. and M/s. Nabh Durga Trading Co. There is no doubt that the assessee has not cooperated before the authorities below and the evidences brought on records before us were not examined by the authorities below though the assessee has filed some documents before the AO. We note that the assessee did not file any records or submissions before the ld. CIT(A) resulting into ex-parte decision by the appellate authority. Therefore, we are of the considered opinion that in the interest of justice and fair play, the assessee needs to be given one more opportunity to present its case before the Ld. CIT(A). Accordingly, we restore the matter to the file of Ld. CIT(A) with a direction to decide the same afresh after affording a reasonable opportunity of hearing to the assessee. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order is pronounced in the open court on 5th February, 2024 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 5th February, 2024 JD, Sr. PS Copy of the order forwarded to: 1. Appellant–M/s. K. R. Tradelink Pvt. Ltd. 2. Respondent – Assessing Officer, National e-Assessment Centre, Delhi. 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata "