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Facts
The assessee appealed against the order of the CIT(A) for Assessment Year 2008-09, which upheld additions made by the Assessing Officer totaling approximately Rs. 2.46 crores. These additions were primarily on account of bogus purchases (Rs. 89.65 lakhs), sundry creditors (Rs. 36.98 lakhs), and unexplained introduction of capital (Rs. 1.20 crores). The assessee did not appear before the Income Tax Appellate Tribunal despite multiple opportunities, nor did they file any written submissions.
Held
The tribunal dismissed all grounds of appeal, affirming the CIT(A)'s order. It found no reason to interfere with the lower authorities' findings given the assessee's failure to appear, provide submissions, or rebut the evidence on record. Specifically, the tribunal upheld the additions relating to bogus purchases due to unproved transactions, sundry creditors where the supplier's existence was doubtful, and unexplained capital under Section 68 of the Income Tax Act, 1961.
Key Issues
1. Whether the CIT(A) correctly upheld additions for bogus purchases. 2. Whether the CIT(A) correctly upheld additions for sundry creditors. 3. Whether the CIT(A) correctly upheld additions for unexplained introduction of capital. 4. Whether the CIT(A)'s order was bad in law or denied reasonable opportunity of hearing.
Sections Cited
143(3), 68
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Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI
(ASSESSMENT YEAR 2008-09) M/s GNJ Impex, Asst. CIT(OSD), C/o Mr. Mahesh CIT-VIII, Sabharwal, C-199, Vs. New Delhi. Sarvodaya Enclave, New Delhi-110017. PAN-AAGFG4992B (Appellant) (Respondent) Assessee by None Department by Ms. Harpreet Kaur, Sr. DR Date of Hearing 19/08/2025 Date of Pronouncement 25/08/2025 O R D E R PER KRINWANT SAHAY, AM: Appeal in this case has been filed by the Assessee against the order dated 26.09.2018 passed by the Ld. Commissioner of Income Tax (Appeals)-31, New Delhi [‘the Ld. CIT(A) for short] for Assessment Year 2008-09. Grounds of appeal are as under:
1. That on the facts and circumstances of the case, assessment order pared us 143(3) of the Income Tax Act. 1961 (hereinafter as "the Act dated 07.12.2010 and the additions made therein by the Assessing Officer (hereinafter as "A.O.") are illegal, bad in law and without jurisdiction and the same have been wrongly and illegally upheld by the Commissioner of Income Tax (Appeals) (hereinafter as "CIT (Appeals)").
GNJ Impex vs. ACIT (OSD) 2. That on the facts and circumstances of the case, the CIT (Appeals) has erred on facts and in law in upholding the addition of Rs. 89,65,916/- made by the AO by erroneously treating purchases as bogus. The said addition has been made by the AO and upheld by the CIT(Appeals) without any basis and ignoring the evidences on record.
That on the facts and circumstances of the case, the CIT (Appeals) has erred on facts and in law in upholding the addition of Rs. 36,98,748/- made by the AO on account of sundry creditor. The CIT(Appeals) has appreciate that the AO could not have made the said addition relying upon the statement of a third party without giving the Appellant any opportunity to cross examine the said third party.
That on the facts and circumstances of the case, the CIT (Appeals) has erred on facts and in law in upholding the addition of Rs. 1.20 crores made by the AO on account of alleged unexplained introduction of capital. The CIT(Appeals) as well as the AO have erred in disregarding all the replies, confirmations and other evidences filed before them.
That, in view of the facts and circumstances of the case, CIT (Appeals) has erred on facts and in law in not appreciating that the additions made are unjust, unlawful, without jurisdiction and are also highly excessive. The CIT (Appeals) has wrongly upheld the order of the AO when the AO had failed to examine evidences filed by the assessee.
That, in view of the facts and circumstances of the case, CIT (Appeals) has erred on facts and in law in merely upholding the additions made by the AO without independently examining the merits of the case.
That, without prejudice, the order of the CIT (Appeals) is bad in law and cryptic as no independent finding is given in respect of the grounds of appeal
raised by the Appellant. Hence the same is liable to be set aside.
8. That, in view of the facts and circumstances of the case, CIT (Appeals) has erred on facts and in law in not affording a reasonable opportunity of hearing to Appellant.
9. That the explanations given, evidence produced and material placed and made available on record have not been properly considered and judicially interpreted and the same do not justify the addition made.
10. That the additions made are based on mere surmises and conjunctures and the same cannot be justified by any material on record and against the principle of natural of justice.
GNJ Impex vs. ACIT (OSD) 11. The Appellant craves leave to add, amend, alter and/or delete any of the above grounds of appeal at or before the time of hearing
2. From the order sheet entry, it is seen that the assessee was given nine opportunities in the last three years, but no one has appeared on behalf of the assessee nor any written submission or any document or details have been filed on behalf of the assesse. Therefore, we are proceeding with the material available on record ex-parte.
3. Although, the assessee has taken grounds of appeal in this case but the main issues/grounds are only three.
4. The first ground of appeal is against the upholding the addition of Rs.89,65,916/- made by the AO treating purchases as bogus. The Ld. CIT(A) in the assessment order has given his finding on this issue as under: “I have examined the appellant's claim and the bank account statement of the said M/s Singhania Brothers. M/s Singhania Brothers had denied doing any business with the appellant. It is therefore not clear as to for what purpose did the appellant make payment in the bank account of M/s Singhania Brothers. The account in which the payments made by the appellant were received has been reproduced above. An examination of the above account indicates that, on a routine basis, cash was deposited in this bank account. Thereafter, cheques were issued and money was transferred out by RTGS/NEFT etc. The pattern of transactions in the aforesaid bank account shows that this bank account was used for purposes of cash deposit and issue of cheques or RTGS or bank transfers. The transactions in this bank account are not genuine. As such, I uphold the AO's view that the purchases as well as payments made to M/s Singhania Brothers remain unproved. Accordingly, ground no. 2 is adjudicated against the appellant.”
5. During the proceedings before us, since, no one appeared for the assessee nor any submission has been filed, therefore, the GNJ Impex vs. ACIT (OSD) findings given by the Ld. CIT(A) after making the analysis and perusal of the documents filed before him by the assessee, seems correct. They have not been rebutted either in person or by any written submission, therefore, we do not want to make any interference in the findings given by the Ld. CIT(a). Accordingly, assessee’s appeal on this issue is dismissed.
6. The second ground of appeal raised by the assesse as against uphold the additions of Rs.3,69,748/- made by the AO on account of sundry creditors on this issue also. The Ld. CIT(A) has given his finding as under: “6.4. In this connection, the appellant has claimed that the goods were purchased on credit and the payments were made in the subsequent year. However, the appellant has not provided confirmation from the said M/s Trend Makers. The AO has noted that as per inquiries made by the Inspector, no firm existed at the supposed address. Since there is no confirmation from the said seller of goods and the fact is that the said firm M/s Trend Makers does not exist at the given address, establishes that the said purchases remains unproved. In fact, the first RTGS made by the appellant, admittedly returned unpaid. All these facts establish the AOs inference of purchases being non genuine.”
7. During the proceedings before us, the Ld. DR relied upon the orders of the Ld. CIT(A). As nobody has appeared on behalf of the assessee nor any submission has been filed for perusal nor any rebuttal has been filed, therefore we find no reason to interfere in the findings given by the Ld. CIT(A) on this issue. Accordingly, the assessee’s appeal on this ground is dismissed.
8. Appeal on ground No.3 is against upholding the addition of Rs.1.20 Cr. made by the AO on account of alleged unexplained