SHIVA CASTINGS PRIVATE LIMITED,MANDI GOBINDGARH vs. INCOME TAX OFFICER, WARD-1, MANDI GOBINDGARH HQ SIRHIND, SIRHIND

1 ITA No.1161/Chandi/2025 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं. / ITA No.1161/CHANDI/2025 (िनधा�रणवष� / Assessment Year: 2017-18) M/s Shiva Castings Pvt. Ltd. ITO Ward-1 बनाम/ Vs. Village Tooran, Amloh Road Mandi Gobindgarg Mandi Gobindgarh – 147301 Sirhind - 140406 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AACCS-3543-H (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by Sh. Ashwani Kumar (CA) & Ms. Deepali Aggarwal (CA) – Ld. ARs : ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 16-04-2026 घोषणाकीतारीख /Date of Pronouncement : 28-04-2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 28-07-2025 in the matter of an assessment framed by Ld. AO u/s 147 r.w.s. 144B of the Act on 29-05- 2023. The sole issue that arises for our consideration is confirmation of twin addition of alleged bogus purchases for Rs.29,64,917/- & Rs.34,29,400/-. Having heard rival submissions and upon perusal of case records, our adjudication would be as under.

2 ITA No.1161/Chandi/2025 2. The assessee is stated to be engaged in manufacturing of steel ingots and trading of iron and steel goods. The assessee’s return of income was processed u/s 143(1). However, the case was reopened and notice u/s 148 was issued on 30-03-2021 pursuant to receipt of information from Addl. CIT, Patiala Range on 02-03-2021 that Shri Jatinder Manro operated M/s A-Mito Impex to advance accommodation entries in the form of bogus sales of MS scrap to the assessee- company. The Ld. AO referred to the statement of assessee’s director Shri Anil Kumar Jindal before GST authorities wherein he admitted the said fact. Going by the same, the purchases made by the assessee from this entity for Rs.29,64,917/- were disallowed and added back u/s 69C r.w.s. 115BBE of the Act. The assessee also made purchases of Rs.34,29,400/- from M/s Kryption wherein similar admission was made on behalf of the assessee-company before GST authorities. Going by the same, the purchases made from this entity were similarly disallowed by Ld. AO while framing the assessment. 3. Upon further appeal, Ld. CIT(A) upheld the reopening of the assessment. On merits, the assessee prayed for suitable profit estimation on these purchases. The assessee stated that the purchases were duly recorded in the books and payments were made through banking channels. However, Ld. CIT(A) rejected the grounds on merits and endorsed the action of Ld. AO in making twin additions. Aggrieved, the assessee is in further appeal before us.

3 ITA No.1161/Chandi/2025 4. The Ld. AR made out a case for profit estimation whereas Ld. Sr. DR placed on record the statement on behalf of assessee-entity before GST authorities to oppose any interference in the impugned order. 5. Upon perusal of assessee’s financial statements and other documents as placed in the paper-book, it could be seen that the assessee has duly maintained its stock and quantitative details of manufactured and traded goods. The accounts of the assessee are duly audited under law and Tax Auditor has certified the stock position of the assessee. The assessee has made sales of Rs.68.38 Crores in this year. It is quite logical that without purchases, there could be no sales. The sales turnover has not been disputed by Ld. AO and no discrepancy has been pointed out in the stock position. On these facts, it could be concluded that though the purchases made from the two suppliers were bogus as admitted by the assessee before GST authorities, however, since quantitative details are not in dispute, the material was purchased by the assessee from grey market to earn unaccounted profits. Therefore, considering the facts of the case, we estimate profit margin of 5% on impugned aggregate purchases of Rs.63,94,317/- which comes to Rs.3,19,716/-. The impugned addition stands restricted to that extent. The argument of Ld. AR that such an addition could not be made u/s 69C is to be rejected since the payments through banking channel are admittedly to bogus suppliers and no purchases have happened against these payments from the two suppliers. In the result, the corresponding ground of appeal stand partly allowed. No other ground has been urged in the appeal.

4 ITA No.1161/Chandi/2025 6. The appeal stands partly allowed. Order pronounced on 28-04-2026

Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 28-04-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR

ITAT CHANDIGARH