UNIVERSAL ENTERPRISES,DALHOUSIE vs. INCOME TAX OFFICER, WARD-36(1)/KOLKATA, SHANTIPALLY

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ITA 400/KOL/2026Status: DisposedITAT Kolkata13 July 2026AY 2016-174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the purchases could not be disallowed solely based on the statement of an individual who was not cross-examined, especially when the assessee's books of account were not rejected and sales were not disputed.

What were the facts?

The assessee, a partnership firm trading in jute mill spare parts, was subject to reassessment. The AO added Rs. 8,04,870/- for bogus purchases based on a statement from an individual claiming to provide accommodation entries.

What were the issues?

Whether purchases can be disallowed as bogus without allowing cross-examination of the deponent and without rejecting the assessee's books of account.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 131,Section 69C

AI-generated summary — verify with the full judgment below

आयकर अपील�य अ�धकरण, कोलकाता पीठ “एसएमसी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA �ी राजेशकुमार, लेखा सट�य के सम� [Before Shri Rajesh Kumar, Accountant Member] I.T.A. Nos. 395 to 400/Kol/2026 Assessment Years: 2011-12 to 2016-17 Universal Enterprises Vs. ITO, Ward-36(1), Kolkata

(PAN: AACFU 3419 M) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 07.07.2026 क� �त�थ Date of Pronouncement/ 13.07.2026 आदेश उ�घोषणा क� �त�थ For the Appellant/ Shri Sushil Kumar Rungta, AR �नधा�रती क� ओर से Shri Mayank Rungta, AR For the Respondent/ Shri Subrata Aich, Sr. DR राज�व क� ओर से

ORDER / आदेश

These are the appeals preferred by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-Addl/JCIT(A)-2, Chennai (hereinafter referred to as the Ld. CIT(A)”] dated 02.12.2025 for the AY 2011-12 to 2016-17 respectively. Since there are common issues involved in these appeals , therefore these are being clubbed and heard together and are disposed off by this common order for the sake of convenience and brevity. First we shall adjudicate assessee’s appeal in ITA No. 395/Kol/2026 for AY 2011-12.

2 I.T.A. Nos.395 to 400/Kol/2026 Assessment Years: 2011-12 to 2016-17 Universal Enterprises 2. The only issue raised in various grounds of appeal is against the order of Ld. CIT(A) confirming the addition of Rs. 8,04,870/- as made by the AO on account of bogus purchases.

3.

Facts in brief are that the assessee filed return of income declaring total income of Rs. 19,820/-. The assessee is a partnership firm trading in Jute Mill Spares parts. The case of the assessee was reopened u/s 147 by issuing notice u/s 148 of the Act on 28.03.2018 which was duly served upon the assessee. The assessee complied with the said notice vide letter dated 16.04.2018 requesting the AO to treat return filed u/s 139(1) on 26.07.2011 in response to notice u/s 148. The case of the assessee was reopened on the ground that the assessment has escaped assessment. The assessee has taken accommodation entries in the form of bogus purchase bills from dummy entities controlled and managed by Shri Sanjiw Kumar Singh. According to AO, the assessee has made purchases from 8 parties aggregating to Rs. 8,04,878/- which were detailed by the AO in para 5 of the assessment order. Thereafter the AO requested the assessee to furnish bills, vouchers, and other evidences qua the said purchases which were accordingly furnished. Thereafter the AO by referring to the said statement of Shri Sanjiw Kumar Singh recorded on oath u/s 131 of the Act on 10.05.2016 wherein he submitted that he was operator of the various fake entities and was providing accommodation bills on commission basis. The AO has extracted the said statement in the assessment order. Finally the AO treated the said purchases as bogus accommodation entries and added the same to the income of the assessee u/s 69C as unexplained expenditure.

4.

In the appellate proceedings, the Ld. CIT(A) also dismissed the appeal of the assessee.

5.

We have heard the rival contentions and perused the material on record. We find that the assessee has made purchases from 8 parties aggregating to Rs. 8,04,878/- which according to AO were shell entities providing accommodation entries without supplying any material. We note that during the course of assessment proceedings, the

3 I.T.A. Nos.395 to 400/Kol/2026 Assessment Years: 2011-12 to 2016-17 Universal Enterprises assessee submitted before the AO the bills, vouchers, invoices , proof of payments etc. We also note that the assessee has produced before the AO books of accounts, stock register, stock tally etc. We note that the goods purchased by the assessee have been sold correspondingly to various parties. We also note that the assessee was not allowed any cross-examination of Shri Sanjiw Kumar Singh whose statement was relied by the AO to make addition. Moreover, the books of account were not rejected and the sales were note disputed. In our considered view, the purchases cannot be disallowed on the basis of mere statement of Shri Sanjiw Kumar Singh who was not even allowed to be cross-examined by the assessee that too without rejections of books. Therefore, under the circumstances, we are not in a position to sustain the order of Ld. CIT(A) confirming the order of AO. We note that the assessee has already accounted for the purchases and the AO has not disputed the corresponding sales. Consequently we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. The appeal of the assessee is allowed.

6.

Issue raised in these appeals in ITA Nos. 396 to 400/Kol/2026 are similar to one as decided by us in ITA No. 395/Kol/2026 AY 2011-12(supra)wherein we have allowed the appeal of the assessee. Accordingly our decision would, mutatis mutandis, apply to these appeals as well.

7.

In the result, all the appeals of the assessee are allowed.

Order is pronounced in the open court on 13th July, 2026

Sd/- Sd/-

(Rajesh Kumar/राजेश कुमार) Accountant Member/लेखा सद�य Dated: 13th July, 2026 SM, Sr. PS

4 I.T.A. Nos.395 to 400/Kol/2026 Assessment Years: 2011-12 to 2016-17 Universal Enterprises Copy of the order forwarded to: 1. Appellant- Universal Enterprises, 40, Strand Road, Model House, 3rd Floor, Room NO. 15B, Kolkata-700001. 2. Respondent – ITO, Ward-36(1), Kolkata 3. Ld. CIT(A)- Addl./JCIT(A)-2, Chennai 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata

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