RAJENDER SHANGARI,JAMSHEDPUR V. DCIT - CIRCLE 1, JAMSHEDPUR

ITA 266/RAN/2023

AI Insights

The case involves Rajendra Shangari, an individual engaged in contractual jobs, who appealed against the order of the National Faceless Appeal Centre (CIT(A)) which upheld the reassessment order by the Assessing Officer. The reassessment added Rs.38,46,188 to Shangari's income, alleging it was from bogus purchases. Shangari contested that his audited books were accepted, and only the purchase figures were disputed without any cogent material, violating principles of natural justice. The Tribunal agreed with Shangari, noting the inconsistency in accepting sales while rejecting corresponding purchases without rejecting the books of account.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708701 (ITAT-RANCHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Principle of natural justice; Bogus
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, RANCHI VIRTUAL HEARING AT KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Ratnesh Nandan Sahay, Accountant Member I.T.A. No.266/Ran/2023 Assessment Year: 2018-19 Rajendra Shangari, Jamshedpur.................…...........................……….……Appellant Plot 9, Bhuiyadih, Agrico, Jamshedpur – 831009. [PAN: ALCPS6310F] vs. DCIT, Circle-1, Jamshedpur.....…..….…..….........……........……...…..…..Respondent Appearances by: Shri Akshay Ringasia, AR, appeared on behalf of the appellant. Shri Vinod Agarwal, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 09, 2025 Date of pronouncing the order : July 15, 2025 ORDER Per Sonjoy Sarma, Judicial Member: The present appeal has been preferred by the assessee against an order dated 16.11.2023 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. Brief facts of the case are that the assessee is an individual who is engaged in contractual jobs to Tata Steel and state government wherein the final job is subject to strict scrutiny by officials and government inspectors and filed return of income declaring an income of Rs.2,58,20,920/- for the assessment year 2018-19. Subsequently, in the case of the assessee, the Assessing Officer invoked section 148 proceedings and completed the assessment u/s 147 r.w.s. 144B of the Act by adding an amount of Rs.38,46,188/- to the income of the assessee stating that the alleged sum was bogus purchase. 3. Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A) against the reassessment order, where the ld. CIT(A) I.T.A. No.266/Ran/2023 Rajendra Shangari, Jamshedpur 2 dismissed the appeal of the assessee and upheld the reassessment order passed by the Assessing Officer. 4. Aggrieved by the said order, the assessee filed the present appeal before this Tribunal raising various grounds. However, the assessee’s primary contention is that the ld. CIT(A) erred in by upholding the order of the Assessing Officer when the books of account of the assessee was not rejected and without rejecting the purchase from the corresponding revenue declared by the assessee which is bad in law. The ld. AR stated that the books of account filed by the assessee were duly audited and not rejected during the assessment proceedings and the Assessing Officer accepted the income declared and sales figures reported by the assessee but solely disputed purchase figures to make the addition, which is not correct. He further argued that when the books of account are not rejected and revenue declared by the assessee is accepted, it is not permissible to treat the purchase as bogus without any cogent material. He also stated that the Assessing Officer cannot adopt selective approach accepting the sales on one hand and rejecting the corresponding purchase on the other, as such the approach violates the principles of natural justice. 5. On the other hand, the ld. DR could not controvert the factual submission made by the ld. AR and merely supported the decisions rendered by the authorities below. 6. We, after hearing of both the parties and perusing the materials available on record, find that the Assessing Officer has made the addition merely on the ground that the purchase amounting to Rs.38,46,188/- was bogus while at the same time not rejecting the books of account or disputing sales or income declared by the assessee when the revenue declared by the assessee is accepted by the Assessing Officer and the corresponding purchases also have to be accepted. Therefore, the action I.T.A. No.266/Ran/2023 Rajendra Shangari, Jamshedpur 3 of the Assessing Officer in rejecting the purchase while accepting the sales is not legally sustainable. We, therefore, find merit in the submissions made by the assessee and view that the addition made by the Assessing Officer is not correct and accordingly we delete the addition made by the Assessing Officer. 7. In the result, the appeal of the assessee is allowed. Kolkata, the 15th July, 2025. Sd/- Sd/- [Ratnesh Nandan Sahay] [Sonjoy Sarma] Accountant Member Judicial Member Dated: 15.07.2025. RS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "