CHANDRA ENGINEERING AND MECHANICAL PVT LTD ,MUMBAI vs. DY, CIT 10(2), MUMBAI

The present appeal preferred by the Assessee is directed against the Order, dated 22/12/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 10/03/2014, passed under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2011-2012. 2. The Assessee has raised following grounds of appeal:

The relevant facts in brief are that the Assessee is a private Limited company engaged in the business of manufacturing of safety fittings. For the Assessment Year 2011-2012 the Assessee filed return of income on 21/09/2011 declaring income of INR.1,01,48,078/- which was processed under Section 143(1) of the Act. Subsequently, the case of the Assessee was selected for regular scrutiny. The Assessing Officer had received information from the Sales Tax Authority, (Mumbai) that certain parties engaged in the business of issuing bogus bills had transacted with the Assessee. For verification of the Assessee was asked to furnish relevant details of purchases made from specified parties. In response, the Assessee furnished copies of ledger, purchase bill, delivery challans, mode of transportation and copy of bank statements in relation to the specified purchases. However, the Learned Assessing Officer was not convinced with the explanation and the supporting documents furnished by the Assessee and proceeded to make disallowance of 100% of the alleged bogus purchases aggregating to INR.1,37,49,150/- made from the following parties:

Being aggrieved the Assessee preferred the appeal before the Learned CIT(A). Vide Order, dated 22.12.2025, the Learned CIT(A) dismissed the appeal preferred by the Assessee observing that the Assessee had failed to furnish satisfactory explanation and supporting documents in support of the purchase transaction under consideration.

Being aggrieved, the Assessee has now preferred the present Appeal before the Tribunal.

We have heard both the sides and perused the material on record.

During the course of hearing the Learned Authorised Representative for the Assessee submitted that all relevant details/documents were placed before the Assessing Officer and the Learned CIT(A) to substantiate the genuineness of purchases. It was pointed out subsequently a notice under Section 148 of the Act was received in relation to purchases made from Padamavati Metal Industries. It was contended that though the name of the aforesaid party was in the list of hawala dealers identified by the Sales Tax Department, the Assessee had genuinely purchased the goods and all the related details such as confirmation, purchase bill, delivery challans & payment proof and TIN details were submitted [Page No. 31 to 41 of the Paper Book].

On perusal of the paper book filed by the Assessee, we find that the Assessee has furnished following details/documents in relation to the alleged bogus purchases made from the 10 parties:

On perusal of the Assessment Order, we note that the Assessing Officer has initially asked for the details of the following three parties on the basis of information received from the Maharashtra Sales Tax Department.

As regards purchases of INR.11,75,572/- made from NS Trading in concerned we find that the supplier is located West Bengal and not in Maharashtra. All the necessary documentary evidence including confirmation from the supplier and delivery challans are on record. Therefore, we delete the addition of INR.11,75,572/- made in respect purchases made from NS Trading.

As regards purchases of INR.22,68,136/- made from Aadeshwar Trading Co is concerned it has been contended by the Assessee, that name of this entity does not appear in the list of defaulters identified by the Sales Tax Department, Maharashtra. Therefore, considering the supporting documents filed by the Assessee, we direct the Assessing Officer to delete the addition after verifying the aforesaid averment made by the Assessee. The Assessee is directed to place before the Assessing Officer all documents/details to verify that name of Aadeshwar Trading Co does not appear in the list of defaulters identified by the Sales Tax Department, Maharashtra.

As regards purchases of INR.27,97,527/- made from Padmavati Metal Industries is concerned, on perusal of the documents/details furnished by the Assessee we are of the view that the documents require verification. It is also admitted position that subsequently notice under Section 148 of the Act was issued in relation to the aforesaid purchases. Therefore, the addition made by the Assessing Officer is set-aside with the directions to the Assessing Officer to examine the genuineness of purchases afresh after taking into consideration all the documents and details furnished by the Assessee. The Assessing Officer shall be at liberty to carry out such inquiry/verification as deemed fit in this regard. All the rights and contentions of the Assessee are left open as this issue is restored back to the file of the Assessing Officer.

In view of the above Ground No. 1, 2, 3 and 6 raised by the Assessee are partly allowed. While the other grounds are dismissed as having been rendered infructuous.

In result, the present appeal preferred by the Assessee is partly allowed.

"धान आयकर आयु" / Pr.CIT 4. िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT,

Mumbai गाड" फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स"ािपत "ित //// उप/सहायक पंजीकार /(Dy./Asstt.