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Facts
The revenue appealed the CIT(A)'s order which restricted the addition for bogus purchases under Section 69C to 12.5%, down from the 100% addition made by the AO. The assessee failed to provide evidence for the genuineness of transactions and was proceeded ex-parte at the tribunal hearing.
Held
The tribunal noted that the CIT(A) had ignored legal provisions and binding precedents while restricting the addition. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication on merits, with specific instructions to consider the cited case laws and provide the assessee an opportunity to be heard.
Key Issues
Whether the CIT(A) erred in restricting the addition for bogus purchases to 12.5% despite the assessee's failure to prove genuineness and in ignoring binding judicial precedents.
Sections Cited
250, 69C
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SANDEEP GOSAIN
Date of Hearing 04.09.2025 Date of Pronouncement 23.09.2025 ORDER Per: SHRI. SANDEEP GOSAIN, J.M.:
The present appeal has been filed by the revenue challenging the impugned order dt. 17.03.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2012-13.
At the time of hearing none appeared on behalf of the 2. assessee when the case was called repeatedly. Even no application for seeking adjournment has been filed. On going through the case records, I noticed that service of the notice was effected through Ld. DR and in this regard Pravinchandra B Dedhia, Mumbai. an affidavit of Shri Ganesh Kumar, Inspector has been placed on record. Apart from this notice has also been issued through email but still none appeared on behalf of the assessee. Therefore considering the said facts assessee is proceeded ex-parte.
Revenue has raised ground Nos. 1 to 7 and all are interrelated and interconnected and relates to challenging the order of Ld. CIT(A) in restricting the additions made u/s 69C of the Act @ 12% of the bogus purchases, therefore I have decided to adjudicate these grounds through the present consolidated order.
I have heard Ld. DR and perused the material placed on record, judgements cited before me and also the orders passed by the revenue authorities. From the records I noticed that assessee is engaged in the business of trading and information was received from the Sales Tax Department that assessee has availed accommodating entries in the form of bogus purchases, accordingly addition @ 100% of bogus purchases was made by the AO while passing the order of assessment. It is important to mention here that assessee has not placed on record any documentary evidences before the AO and the assessment was framed ex-parte.
Pravinchandra B Dedhia, Mumbai.
Later on during the appeal proceedings Ld. CIT(A) confirmed that assessee has failed to discharge the primary onus cast upon him to prove the genuineness of the transactions and also failed to adduce any credible evidence to demonstrate the genuineness of the transaction, but still restricted the additions @ 12.5% of the total bogus purchases. I have noticed that Ld. CIT(A) ignored the basic provisions of law and has not considered the decision of Hon’ble jurisdictional Bombay High Court in the case of DCIT Vs. Kanak Impex I. Ltd, 474 ITR 0175 (Bom-HC) and Hon’ble Supreme Court in the case of M/s NK Protiens Ltd in SLP CC No. 769 of 2017 dated 16.01.2017. As has been submitted by Ld. DR that these decisions were referred before Ld. CIT (A) but the same were ignored and not considered or referred in the order. Therefore considering the overall circumstances of the present case, I deem it proper to restore the matter back to the file of Ld. CIT(A) for deciding the appeal afresh on merits by considering the above decision and by providing opportunity to the assessee. The assessee shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings.
Before parting, I make it clear that my decision to restore the matter back to the file of the CIT(A) shall in no way be construed as having any reflection or expression on
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 23/09/2025