LILAM CHAND SAND (HUF),MUMBAI vs. ACIT/DCIT CIRCLE 23(1), MUMBAI, MUMBAI

This appeal is directed against the order dated 23.12.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the CIT(A)"], arising out of the assessment order passed under section 147 read with section 144B of the Income-tax Act, 1961 ("the Act") dated 13.03.2024 for the assessment year 2019-20.

Briefly stated, the assessee, a HUF, is engaged in the business carried on under the name and style of Shourabh Enterprises. It filed its return of income declaring total income of Rs.5,39,420/-. Subsequently, on the basis of information received from the Investigation Wing that the assessee had allegedly obtained accommodation purchase entries from M/s Jash Dealmark Ltd., proceedings under section 148A were initiated and the assessment was reopened. During the reassessment proceedings, the Assessing Officer treated purchases aggregating to Rs.82,19,014/- as bogus on the ground that M/s Jash Dealmark Ltd. was merely an accommodation entry provider and the assessee had failed to establish actual movement of goods. Accordingly, the entire amount of purchases was added to the income of the assessee. The learned CIT(A) affirmed the action of the Assessing Officer and dismissed the appeal.

The learned Authorised Representative submitted that the assessee had discharged the primary onus by producing purchase invoices, quantitative stock records, sale invoices evidencing subsequent sale of the very goods purchased and bank statements reflecting payment through banking channels to M/s Jash Dealmark Ltd. It was contended that the sales have been accepted by the department and there is complete quantitative tally of purchases and sales. Therefore, no addition of the entire purchases could be sustained merely because the supplier was subsequently found to be an accommodation entry provider.

Per contra, the learned Departmental Representative strongly supported the orders of the lower authorities. It was submitted that the

We have considered the rival submissions and perused the material available on record. There is no dispute that the supplier, namely M/s Jash Dealmark Ltd., was found by the Investigation Wing to be an accommodation entry provider. Therefore, the possibility that the assessee procured accommodation bills from the said concern cannot be brushed aside lightly. At the same time, it is equally relevant to note that the assessee has produced purchase invoices, quantitative stock records, sale invoices corresponding to the goods purchased and bank statements evidencing payments through banking channels. The Revenue has also accepted the sales declared by the assessee and no discrepancy has been pointed out in the quantitative records maintained by it.

In the result, the appeal of the assessee is partly allowed.