SUJATA MAKHAL,HOWRAH V. ITO, WARD - 47(1), KOLKATA

ITA 104/KOL/2025

AI Insights

Sujata Makhal appealed against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, which was passed under section 250 of the Income Tax Act, 1961, for the assessment year 2018-19. The appeal was initially against an assessment order that added Rs. 66,91,461 to her income, alleging that these were bogus purchases from non-existent parties. The Tribunal noted that the assessee had not been adequately represented during the earlier proceedings, which led to the decision to remand the case back to the Assessing Officer for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669258 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Other Referred Cases: The Commissioner of Income Tax-1, Mumbai v. M/s Nikunj Eximp Enterprises Private limited, Deputy Commissioner of Income Tax v. Sharp Mint Ltd., S. M. Hassan vs. New Gramophone House, ITO vs. Daya Chand Jain Vaidya, Pr. Commissioner of Income Tax-13, Mumbai v. Vaman International Private Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Bogus purchase; Principle of natural justice; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 133(6); 69C

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal Vs. ITO, Ward-47(1), Kolkata (Appellant) (Respondent) PAN: AFTPM0621F Appearances: Assessee represented by : Miraz D. Shah, AR. Department represented by : S.B. Chakraborty, Addl. CIT, Sr. DR Date of concluding the hearing : 19-June-2025 Date of pronouncing the order : 24-June-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 03.12.2024, which has been passed against the assessment order u/s 147 r.w.s. 144B of the Act, dated 24.03.2023. Page | 2 I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. FOR THAT the impugned order passed u/s 250 of the Income Tax Act, in the wake of addition of Rs. 66,91,461/- on account of purchases alleged to be under the guise of being bogus, thereby from alleged non-existent parties, namely M/s Shyam Trading Co. bearing GSTIN- 19BECPB9534BIZT and M/s Daania Trading Private Limited bearing PAN-AAKCM8571F is completely wishful, unsustainable and bad in the eyes of the law. 2. FOR THAT non-compliance of notices u/s 133(6) of the Act by the alleged parties is no reason and as such completely irrational for adding back of income in relation to Bonafide and genuine purchases effected, to the income of the appellant thereby taking into due consideration the case of The Commissioner of Income Tax-1, Mumbai v. M/s Nikunj Eximp Enterprises Private limited as has been held by the High Court of Judicature at Bombay [2013]35 taxmann.com 384(Bombay). 3. FOR THAT the purported addition of Rs. 66,91,461/- is muddled and fundamentally unsound thereby liable to be vitiated in the eyes of the law on account of the fact that books of accounts of the appellant were never rejected and back-to-back sales effected from such purchases thereby, at no time were doubted. 4. FOR THAT reliance has been placed upon the settled law of the land as has been held by the Hon'ble Income Tax Appellate Tribunal, Delhi in the case of Deputy Commissioner of Income Tax v. Sharp Mint Ltd. [2024] 159 taxmann.com 1381 (Delhi. Trib.) 5. FOR THAT all such testimonials in the form of Original Purchase Invoices, Ledger copies of the alleged parties, Banking Statements, Form GSTR 2A and Transportation Details have been offered by the appellant towards the credit of the Revenue and as such in view of every such documents furnished, there can be no implication of 69C of the Act, 1961 let alone 115BBE. 6. FOR THAT the Best Judgement Assessment u/s 144 of the Act as has been conducted by the Ld. Assessing Authority and thereafter being confirmed by the Ld. CIT(A), is redundant considering reasonable guess and intelligent well-grounded estimate had not been exercised and consequently, such Best Judgement Assessment conducted constitutes pure surmises and conjectures. Reliance has been placed upon the case of S. M. Hassan vs. New Gramophone House as decided by the Hon'ble Apex Court of India. Page | 3 I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal. 7. FOR THAT as has been decided by the Hon'ble High Court at Allahabad, in the case of ITO vs. Daya Chand Jain Vaidya (1975) 98 ITR 280, mere rejection of good explanation does not convert good proof into no proof. 8. FOR THAT opportunity of cross-examination has not been conferred upon the appellant whereby the same is an integral part of the assessment as has been decided in the case of Pr. Commissioner of Income Tax-13, Mumbai v. Vaman International Private Limited as has been upheld by the High Court of Judicature at Bombay [ITA No. 1940 of 2017]. 9. FOR THAT the principles of natural justice have been severely compromised given the circumstances of the case at hand and as such is unsustainable. 10. FOR THAT your appellant prays for appropriate relief at the Appellate Tribunal Forum and your honor is requested to pass such order as may be deemed fit. Your appellant craves leave to add supplement or amend further ground or grounds at the time of hearing.” 3. Brief facts of the case are that the assessee is an individual and had filed her return of income for AY 2018-19 showing total income of ₹18,11,490/-. The case was selected for scrutiny u/s 148 of the Act. Notice u/s 148 of the Act was issued by the Jurisdictional Assessing Officer. Further, the case was referred to the FAO for completion of assessment proceedings. During the assessment proceeding, it was found that the assessee had filed income tax return in response to the notice u/s 148 of the Act. However, during the assessment proceeding, notices u/s 142(1) of the Act were issued to the assessee along with the questionnaire. Further, a show cause notice dated 18.03.2023 was issued to the assessee for variations proposed. In response to these notices, the assessee had filed reply online. The reply of the assessee had been considered, but was found not tenable as the assessee had not filed complete documentary evidences to establish that the purchases made were genuine and from verifiable sources. The Assessing Officer (hereinafter referred to as Ld. 'AO') noted that the Page | 4 I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal. transactions of purchases remained unexplained and unverified. Therefore, payment of ₹66,91,461/- made for bogus purchase from shell concerns M/s. Shyam Trading Co. (Prop. M/s. Snehashis Barai & M/s. Daania Trading Pvt. Ltd. was added to the total income of the assessee as unexplained expenditure for the year under consideration u/s 69C of the Act. The Ld. AO assessed the total income determined at ₹85,02,951/- u/s 147 r.w.s 143(3) read with section 144B of the Act. 3.1 Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee on account of non-representation before him. Further, aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before this Tribunal. 4. Rival contentions were heard and the submissions made and the details filed have been examined. It was submitted by the Ld. AR that the order of the Ld. CIT(A) is ex parte and the additions made by the Ld. AO which have been confirmed on account of proper representation not being made before the Ld. CIT(A), which require verification at the level of the Ld. AO and requested that the matter may be remanded to the Ld. Assessing Officer. 5. The Ld. DR did not raise any serious objection to the request made by the Ld. AR. 6. We have considered the submissions made and note that in the absence of proper representation the assessee could not file the required details which is assured to be filed before the Ld. AO in case the matter is remanded. Hence, in the interest of justice, both the orders of the Ld. CIT(A) as well as the Ld. AO are hereby set aside and the matter is remitted back to the Ld. AO for making the assessment de novo. Page | 5 I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are allowed for statistical purposes. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24th June, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.06.2025 Bidhan (P.S.) Page | 6 I.T.A. No.: 104/KOL/2025 Assessment Year: 2018-19 Sujata Makhal. Copy of the order forwarded to: 1. Sujata Makhal, Ichapur, Soumachanditala, Santragachi, Howrah, West Bengal, 711104. 2. ITO, Ward-47(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "