Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 336803 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-05-2025
Appeal Filed By
Assessee
Order Result
Allowed
Assessment Year
2014-2015
Judgement Text
" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.541/Ahd/2024 (Assessment Year: 2014-15) Steel And Scrap Supplier, Plot No. 182/A, Suvidha Township, Subhasnagar, Bhavnagar-364001 Vs. Assistant Commissioner of Income Tax, Circle-1, Bhavnagar [PAN No.ABSFS2658F] (Appellant) .. (Respondent) Appellant by : Shri Sarju Mehta, A.R. Respondent by: Shri V. Nandakumar, CIT DR Date of Hearing 25.02.2025 Date of Pronouncement 22.05.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 14.03.2024 passed for A.Y. 2014-15. 2. The Assessee has taken the following grounds of appeal:- “1. The CIT(A) has erred in law and on facts by issuing the impugned order which is not reasoned one and without dealing with pleas raised by the appellant and also by not giving any findings for not allowing cross examination of various persons though specifically asked by the appellant during the assessment proceeding. 2. The CIT(A) has erred in law and on facts in upholding the Ld. AO’s action of disallowance of purchase of Rs. 3,16,50,319/- and also in sustaining the action of invocation of section 69C. 3. Your Appellant reserves the right to add, alter, amend and withdraw any of the above grounds of appeal.” 3. The brief facts of the case are that the assessee firm filed return of income for the impugned assessment year declaring total income of Rs.8,36,620/-. Subsequently, the Assessing Officer came into possession of ITA No. 541/Ahd/2024 Steel And Scrap Supplier vs. ACIT Asst. Year –2014-15 - 2– certain information received from ADIT (Investigation), Bhavnagar and the Assessing Officer observed that as per information received from the Investigation Wing, the assessee was one of the beneficiaries and had availed accommodation entries amounting to Rs. 2,99,73,147/- from certain dummy entities viz. Zara Alloys Pvt. Ltd., Virshan Impex Pvt. Ltd. and Zara Tradelink Pvt. Ltd. The assessee had made payments to these dummy entities towards certain purchases, with a view to reduce it’s profits. Accordingly, notice under Section 148 of the Act was issued to the assessee. During the course of re-assessment proceedings, the Assessing Officer asked the assessee to provide certain details, surrounding the transaction, which as per the Assessing Officer were not provided by the assessee. The Assessing Officer observed that the assessee submitted certain documents, but no documents with respect to transactions made with M/s. Zara Alloys Pvt. Ltd., a shell / dummy company were furnished by the assessee, except for a ledger copy containing transaction details. As per the ledger submitted to the Assessing Officer, the assessee claimed to have purchase goods valued at Rs.3,16,50,319/- from M/s. Zara Alloys Pvt. Ltd. for which payment of Rs.2,99,73,147/- was claimed to have made, leaving balance payable amounting to Rs.16,77,172/-. The Assessing Officer was of the view that the assessee had no valid explanation to substantiate the nature of transaction made with M/s. Zara Alloys Pvt. Ltd., a shell entity having no real business. Further, the Assessing Officer also issued notice under Section 133(6) of the Act to M/s. Zara Alloys Pvt. Ltd. to furnish details of goods sold to the assessee firm, with certified copies of sale bills / invoices, road challan, VAT returns etc. to prove the sale made to the assessee. But till the passing of the assessment order, no compliance / confirmation was received from M/s. Zara Alloys Pvt. Ltd. Accordingly, in light of these facts, the Assessing Officer held that the purchase claimed to have been made from M/s. Zara Alloys Pvt. Ltd. is not genuine. Accordingly, a sum of Rs. 3,16,50,319/- was added to ITA No. 541/Ahd/2024 Steel And Scrap Supplier vs. ACIT Asst. Year –2014-15 - 3– the assessee’s income as unexplained expenditure under Section 69C of the Act. 4. In appeal, Ld. CIT(A) dismissed the appeal of the assesse with the following observations: “7.1 I also find that the assessee did not file any submissions before the AO during the course of assessment proceedings. Nor did the assessee file any submissions supported by proper evidence along with a petition under Rule 46A for admission of evidence in the appellate proceedings. The assessee has not controverted the findings of the AO supported by proper evidence. I also find that the additions made by the AO are based on solid evidence which was confronted to the assessee by the AO and the additions are made as per the provisions of law. No evidence whatsoever has been filed by the assessee to substantiate and buttress the grounds of appeal. In the circumstances, I do not see any reason to interfere with the well reasoned and speaking order of the AO. Therefore the additions made by the AO are confirmed. Hence, the grounds of appeal are Dismissed.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee. 6. Before us, the Counsel for the assessee submitted that during the course of assessment proceedings, the assessee had requested for an opportunity of cross-examination, however, such opportunity of cross- examination was not provided to the assessee since the Assessing Officer was of the view that such opportunity of cross-examination is not required to be allowed in the instant facts. The Counsel for the assessee submitted that at Page 8 of the assessment order, it is evident that the assessee had sought opportunity of cross-examination, but the same was denied to the assessee. Further, the Counsel for the assessee submitted that this issue was raised before the Ld. CIT(A) as well, but Ld. CIT(A), while dismissing the appeal of the assessee did not give any finding (refer Page 8 of Ld. CIT(A)’s order) on the opportunity of cross-examination having been denied to the assessee. Secondly, the Counsel for the assessee submitted that various evidences were furnished by the assessee before Ld. CIT(A), which were not considered by Ld. CIT(A) while dismissing the appeal of the assessee. The Counsel for the ITA No. 541/Ahd/2024 Steel And Scrap Supplier vs. ACIT Asst. Year –2014-15 - 4– assessee drew our attention to Para 7.1 of the Ld. CIT(A)’s order and also the written submission filed by the assessee forming part of the order passed by the Ld. CIT(A). The Counsel for the assessee submitted that in the instant facts, the aforesaid order was clearly passed against the principles of natural justice, wherein adequate opportunity of hearing / cross-examination was not provided to the assessee and also various evidences/ supporting documents filed by the assessee were omitted to be considered by Ld. CIT(A), during the course of appellate proceedings. 7. On going through the instant facts and the interest of justice the matter is hereby restored to the file of Assessing Officer for de-novo consideration. The assessee would be at liberty to place any additional documents / supporting evidences in support of it’s claim. 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 22/05/2025 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/05/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "
AI Insights
The case involves an appeal by Steel And Scrap Supplier against the order of the Commissioner of Income Tax (Appeals), which upheld the disallowance of purchases amounting to Rs. 3,16,50,319 and the invocation of section 69C of the Income Tax Act. The Assessing Officer had initially disallowed these purchases based on information from the Investigation Wing, suggesting that the assessee had availed accommodation entries from dummy entities to reduce profits. The CIT(A) dismissed the appeal, finding no substantial evidence from the assessee to counter the additions made by the AO. The assessee contested the denial of cross-examination opportunities and the non-consideration of various evidences in the appellate proceedings. The Tribunal, acknowledging the procedural lapses, restored the matter for a fresh assessment.
