SHAM SUNDER GUPTA,LUDHIANA vs. ITO WARD 5(1), LUDHIANA

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ITA 82/CHANDI/2025Status: DisposedITAT Chandigarh04 August 2026AY 2019-203 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was not supported by concrete evidence and was based solely on allegations. The assessee had provided supporting purchase invoices and ledger extracts showing banking channel transactions.

What were the facts?

The Assessing Officer reopened the assessee's case alleging under-invoicing of purchases based on search findings in a supplier's case. The AO made an addition of Rs. 6,07,135/- for alleged unexplained expenditure.

What were the issues?

Whether an addition can be made based on allegations from a third party's search without independent evidence against the assessee, and if the assessee's evidence of banking transactions is sufficient.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 27.12.2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 of the Act on 27.03.2024. The sole grievance of the assessee is confirmation of

addition for Rs.6,07,135/-. Having heard rival submissions, the appeal is disposed-off as under. 2. The Ld. AO made allegation of under-invoicing of purchase transactions by the assessee and reopened the case of the assessee. It transpired that the assessee made purchases from M/s Gurdip Cycle Industries. Going by search finding in the case of that entity wherein it was alleged that invoices were raised to the extent of 70% only, Ld. AO alleged unexplained expenditure by the assessee to the extent of Rs.6,07,135/- and added the same to the income of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3. It could be seen that the impugned addition is not backed up by any concrete evidence on record. The addition has been made by Ld. AO merely on the allegation that the assessee made purchases in cash from M/s Gurdip Cycle Industries. The same is based on search finding in that group. So far as the assessee is concerned, no such evidence has emanated from the assessee. The assessee has duly furnished supporting purchase invoices as well as ledger extract of the supplier to support its argument that all purchases have happened through banking channels only and no transaction, in cash, has been carried out by the assessee. We also find that the case of M/s Gurdip Cycle Industries stood decided in their favor for AYs 2019-20, 2020-21 & 2022-23 by the decision of this Tribunal vide ITA Nos.1205/Chd/2024 & ors. common order dated 03.09.2025. In that case, Ld. CIT(A) had deleted the impugned addition and the departmental appeal against the

same stood dismissed by Tribunal. On these facts, the impugned addition is liable to be deleted. We order so. 4. The appeal stand allowed. Order pronounced on 04th August, 2026

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 04-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH

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