LATE KAILASH CHANDRA AGRAWAL, MAHASAMUND, REPRESENTED BY LEGAL HEIR ANKUSH AGRAWAL,MAHASAMUND vs. ITO, WARD MAHASAMUND, MAHASAMUND

No one appeared on behalf of the assessee. No adjournment letter filed, hence, we proceeded ex parte qua assessee. We heard Ld. DR and perused the records. Late Shri Kailash Chandra Agrawal was running a proprietorship concern and had filed return of income for AY 2014-15 on 28.11.2014 declaring total income at Rs.6,87,920/-. The Ld. AO had issued a notice under section 148 of the Act on 30.03.2021. In response to the notice, the assessee filed return of income on 01.07.2021 declaring total income at Rs.6,87.920/-. During the assessment proceedings, the assessee had filed elaborate submission which has been recorded in the assessment order at paragraph 3. The submission of the assessee appearing at paragraph 3 is reproduced here as under:

Thus, during the assessment proceedings, the assessee had filed elaborate explanation, explaining the purchases made from M/s Maa Sharda Process. However, the Ld. AO made addition of Rs.45,75,500/-. The relevant paragraph of the assessment order at page 4 is reproduced as under: “Bogus purchases of Rs.45,75,500/-: As per information available in this office, the assessee Firm has made bogus purchases worth Rs.45,75,500/-from Sh. Rakesh Sharma Prop. Mis Maa Sharda Process. In its reply the assessee has furnished that it has made purchases from Shri Rakesh Sharma, but the assessee has not furnished any reliable documentary evidence in support of its contention. Various opportunities were allowed to the assessee for furnishing documentary evidence, but the assessee has not furnished any reliable documentary evidences to prove genuineness of the above transaction. Considering these facts, bogus purchases made by the assessee of Rs.45,75,500/- from this party are treated income of the assessee and added back in the total income of the assessee for the year under consideration.”

Aggrieved by the assessment order, the assessee filed appeal before the Ld. CTI(A). However, unfortunately, the assessee Shri Kailash Chandra Agrawal expired on 16.02.2023 but Ld. CIT(A) passed order under section 250 of the Act for AY 2014-15 on 30.09.2024 in the name of Shri Kailash Chandra Agrawal without bringing the legal heir on record. The legal heir had filed an appeal before the ITAT in ITA No.502/RPR/2024 vide order dated 19.12.2024, the ITAT set aside the order dated 30.09.2024 with a direction to bring on record the legal heir. Accordingly, the Ld. CIT(A) passed an order under section 250 r.w.s. 254 of the Act for AY 2014-15 on 24.02.2026. At paragraph 7 of the said order, Ld. CIT(A) has mentioned that proceedings were completed in the name of Late Kailash Chandra Agrawal through legal heir Shri Ankush Agrawal. However, Ld. CIT(A) clearly copied the earlier order of the earlier Ld. CIT(A) and upheld the addition.

Aggrieved by the order of the Ld. CIT(A) passed under section 250 r.w.s. 254 of the Act, the legal heir of the assessee filed appeal before this Tribunal. Thus, it is a second round of appeal before this Tribunal. In this case, in the assessment order, the Ld. AO made addition of Rs.45,75,500/-. The relevant paragraph has been reproduced above. The Ld. AO has made addition alleging that the purchases made by the assessee from M/s Maa Sharda Process, Raipur were bogus purchases. However, in the entire assessment order, there is no documentary evidence brought on record by the Ld. AO to prove the allegation regarding bogus purchases. In contrast, the assessee during the assessment proceedings filed copies of the invoices demonstrating the purchases made from M/s Maa Sharda Process. The assessee also submitted that these purchases are verified by Mandi Officer which is a government authority. The assessee also filed bank statements to demonstrate that the payments were made through banking channel only. The assessee also filed ledger account, copy of Mandi Anughyan certifying sales and purchases. Thus, as far as assessee is concerned, the assessee had fulfilled his onus by filing above referred document. The Ld. AO has merely alleged that purchases were bogus without brining on record any documentary evidences. In these facts and circumstances of the case, the allegation of the Ld. AO is based on surmises and conjectures and accordingly, we direct the Ld. AO to delete the addition made in the hands of the assessee.

In the result, appeal of the assessee is allowed.