MAHABIR PARSHAD GOEL,DELHI V. ITO WARD 47(1), NEW

ITA 1403/DEL/2024

AI Insights

The case involves Mahabir Parshad Goel, the appellant, who appealed against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, which confirmed the additions made by the Assessing Officer (AO) regarding bogus purchases. The AO had reopened the assessment based on information from the DDIT (Inv.) that the assessee had taken accommodation entries from certain individuals, which were considered bogus. The CIT (A) upheld the AO's decision as the assessee failed to provide new material or evidence. The Tribunal, however, partly allowed the appeal by adjusting the gross profit rate applied to the bogus purchases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361215 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: VASU BANSAL
• Keywords: Additional evidence; Bogus purchase; Accommodation entries; Competent authority; Bogus
• Section: 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’: NEW DELHI BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.1403/DEL/2024 (Assessment Year: 2012-13) Mahabir Parshad Goel, vs. ITO, Ward 47 (1), 4080-81, First Floor, Naya Bazar, New Delhi. Chandni Chowk, Delhi – 110 006. (PAN : ABHPG7332H) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Vasu Bansal, CA REVENUE BY : Shri Sanjay Kumar, Sr. DR Date of Hearing : 13.03.2025 Date of Order : 21.05.2025 O R D E R 1. The assessee has filed this appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 30.01.2024 for the Assessment Year 2012-13. 2. Brief facts of the case are, assessee filed its return of income declaring income of Rs.4,85,670/- for AY 2012-13 on 27.09.2012. Subsequently, AO received information from DDIT (Inv.), Unit 6 (2) that assessee has taken accommodation entry from Ashok Kumar Gupta, Sandeep Gupta and Anuj Gupta and they have accepted the same on oath in statement 2 ITA No.1403/DEL/2024 recorded during survey action on 30.11.2018. The AO observed that assessee is one of the beneficiaries who has taken accommodation entries from Ashok Kumar Goel to the extent of Rs.21,17,859/-. After thorough verification of the details available on record, the AO reopened assessment by issue of notice u/s 148 of the Act after proper approval from competent authority. In response, assessee filed return of income on 19.09.2012 declaring the income in the original return of income. After considering the detailed submissions filed by the assessee, the AO sustained the additions considering the same as bogus. The AO also made addition of relevant brokerage commission for availing accommodation entries 3. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A) and before ld. CIT (A), the assessee has not complied to various notices issued. The assessee has not submitted any new material or any additional evidences to support his case. Therefore, ld. CIT (A) has confirmed the additions made by the AO. 4. Aggrieved assessee is in appeal before us raising following grounds of appeal:- “1. For that the learned A.O. as well as the learned NFAC did not properly consider the submissions made by the Assessee before them. 3 ITA No.1403/DEL/2024 2. For that impugned order is a completely non-reasoned order and it does not at all disclose any reasoning as to how and why the Assessee's contention is not convincing and not tenable. 3. The addition amounting to INR 21,17,859 was purely made on the survey conducted on the premises of the third party and on the basis of the statement that was given by the third party during the proceeding conducted upon him. Further, no chance was given to the appellant to cross examine the third party and also the appellant has documents on record that it wants to submit that will refute the claim of the third party which was relied upon by the AO and NFAC.” 5. At the time of hearing, ld. AR of the assessee submitted that based on the submission of third party in the survey proceedings, the additions were made in the hands of the assessee. He submitted that the case of the assessee was already subjected to regular assessment and AO has accepted the return of income. He submitted that ld. CIT (A) has sustained the additions made by the Assessing Officer, he pleaded that in case the purchases are considered as bogus, the Department has not suspected the corresponding sales declared by the assessee. He prayed that assessee has declared GP rate of 6.89% already in his return of income and the same may be sustained. 6. On the other hand, ld. DR of the Revenue relied on the orders of the authorities below. 7. Considered the rival submissions and material placed on record. I observed that based on the information received from Investigation Wing, the purchases declared by the assessee were found to be bogus purchases. 4 ITA No.1403/DEL/2024 At the same time, I observed that assessee has already declared the sales and also recorded accommodation entries, the Assessing Officer has disallowed the whole purchases as not proper. However, I observed that Hon’ble High Court has considered similar issues and they held that in case of bogus purchases, only certain percentages has to be sustained as income of the assessee considering the actual benefit earned by the assessee in such transactions. I observed that assessee has already declared GP rate of 6.89% in its return of income. Therefore, in my considered opinion, in the cases of bogus purchases, various Benches of ITAT has sustained GP rate of 12.5% as reasonable addition. In the present case, assessee has already declared GP rate of 7% (approx.) in the return of income, therefore, the differential rate of 5.5% may be added as income of the assessee i.e. 12.5% minus 7% and I hold and direct accordingly. 8. In the result, the appeal of the assessee is partly allowed as indicated above. Order pronounced in the open court on this 21st day of May, 2025. Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 21.05.2025 TS 5 ITA No.1403/DEL/2024 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "