RUDRA SALES COMPANY,OLD WASHERMENPET vs. DCIT NON CORP WARD 6(1), GREAMS ROAD

Briefly the facts of the case are that the appellant is a Partnership Firm engaged in the business. The return of income for the Assessment Year 2022-23 was filed on 29.10.2022 declaring total income of Rs.2,03,700/-. Against the said return of income, the assessment was completed by e-Assessment Unit of the Department(hereinafter called ‘AO’) vide order dated 08.03.2024 passed u/s.143 r.w.s 144B of the Income Tax Act, 1961 at a total income of Rs.13,63,04,363/-. While doing so, the Assessing Officer made an addition of Rs.7,50,79,452/- on account of bogus purchases. As the appellant had failed to prove the genuineness of the purchases. Similarly, the Assessing Officer made addition of outstanding sundry creditors of Rs.6,10,21,211/- for the failure of the appellant to furnish requisite information substantiating the genuineness of the creditors.

Being aggrieved by the above assessment order, appellant filed an appeal before the ld.CIT(A), who vide impugned order partly allowed the appeal by sustaining addition on account of sundry creditors of Rs.72,33,856/- in respect of bogus purchases, the ld.CIT(A) directed the Assessing Officer to estimate the gross profit @15% on bogus purchases following certain judicial precedents.

Being aggrieved by the order of the ld.CIT(A), the appellant is in appeal before us in the present appeal. When the appeal was called on, none appeared on behalf of the appellant despite due service of notice of hearing. Therefore, after hearing Sr.DR, we proceeded to dispose-off of the appeal as under.

On the other hand, ld.Sr.DR submits that the order of the ld.CIT(A) is in accordance with law on the bogus purchase and on the sundry creditors, the ld.CIT(A) after considering evidence submitted before him given substantial relief, therefore, no interference called-for.

We heard Learned Sr.DR and perused the material on record. The Assessing Officer made an addition on account of bogus purchases on account of failure of the appellant to substantiate the genuineness of the expenditure. However, ld.CIT(A) on due consideration of the information filed before him and following the law laid by Hon’ble Gujarat High Court directed the Assessing Officer to estimate Gross Profit at 15% on the bogus purchases. The decision of the ld.CIT(A) in accordance with the settled position of law, therefore, we do not find any infirmity in the order of the ld.CIT(A), accordingly, we uphold the order of ld.CIT(A). Similarly, the ld.CIT(A) has confirmed the addition on account of sundry creditors only to the extent of Rs.72,33,856/- as the appellant had failed to substantiate the genuineness of sundry creditors by proving the identity, creditworthiness and genuineness, therefore the order of ld.CIT(A) is based on proper appreciation of evidence on record and law. Therefore, we do not find any reason to interfere with the order of ld.CIT(A).

In the result, appeal filed by the Assessee stands dismissed. Order pronounced in the open Court on 26th May, 2026.