PAWAN KINGRANI, BALODA BAZAR,BALODA BAZAR vs. ITO, BHATAPARA, BHATAPARA

ITA 279/RPR/2026Status: DisposedITAT Raipur22 April 2026AY 2016-176 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, following a previous similar order, held that the issue of bogus purchase bills by rice millers is sub-judice before the jurisdictional High Court. Therefore, the matter was remanded back to the CIT(Appeals) to await the High Court's decision and then adjudicate afresh.

What were the facts?

The assessee, engaged in the poha mill business, made purchases from farmers and small traders without bills. To regularize accounts, bills were taken from certain traders, and the assessee declared an income of Rs. 1,50,000/- under the Income Declaration Scheme, 2016, on these purchases. Despite this, the AO disallowed 25% of the total suspicious purchases, adding the balance to the total income.

What were the issues?

Whether the disallowance of 25% of purchases from unidentified parties is justified when the assessee had declared income under IDS and the larger issue is pending before the High Court.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sunil Kumar Agrawal &, Ms. Vidya Verma, CAs

For Respondent: Dr. Priyanka Patel, Sr. DR

Hearing: 22.04.2026Pronounced: 22.04.2026

आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 12.02.2024 for the assessment year 2016-17 as per the grounds of appeal on record.

The brief facts in this case are as follows: “Appellant is an Individual engaged in the business of manufacturing and trading of food grains. He runs a poha mill named as Mayur Industries, Bhatapara. The office and mill of appellant is situated at Village: Dhaurabhata, Bhatapara (CG). During the year under consideration, appellant had made certain purchases from farmers and small unregistered traders who do not provide bills. For the purpose of regularizing his books of accounts, appellant has taken bills from certain traders without having any mala fide intentions of suppression of profit. Appellant received a notice from the Income Tax Officer, Bhatapara dated 12_09.2016 regarding information with the department that appellant had entered into certain suspicious transactions. In the same notice it was mentioned to opt for IDS Scheme, 2016. Even appellant has not evaded any taxes but considering the notice of the department and also option suggested in the same notice by the department and also to avoid further litigations and to buy peace of mind, the appellant opted to adopt IDS Scheme and had declared income of Rs.1,50,000/- for AY 2016-17 on purchases made from such parties and had duly paid the amount of taxes on above Scheme. The disclosure made under the Income Declaration Scheme, 2016 was accepted by the Honourable Commissioner of Income Tax and Form 4was also issued. Further it was clearly mentioned in Form 4 that disclosure of-income was against purchases. Even after the disclosure and payment of taxes on above income in IDS, this fact may also be notable here that the appellant has not added/increased the above amount of Rs 1,50,000/- in his capital account. This fact also shows the bona-fide intention of the appellant. Further it was clearly mentioned in the IDS Scheme, 2016 that if a person declares its income under the

3 Pawan Kingrani Vs. ITO, Bhatapara (C.G.) ITA No.279/RPR/2026

Scheme and properly pays the relevant amount of taxes and penalty on the same then no further proceedings shall be initiated by the Income Tax Department regarding the same matter. However even after paying the relevant amount of taxes and penalty, the learned AO has manually selected the case for scrutiny proceedings and accordingly notice u/s. 143(2) was issued. The assessment proceedings was duly conducted and order u/s.143(3) was issued making addition to the point already disclosed under Income Declaration Scheme, 2016. The leamedA0 has disallowed 25 percent of the total amount of purchases from such parties (which come to Rs.3,75,000/-) and after giving relief of amount declared in IDS (i.e. Rs.1,50,000/-) added the balance amount of Rs.2,25,000/- to the total income of the appellant. However, such addition is not justified as during the course of scrutiny, appellant has provided details regarding quantity and rates of purchases made by him during the year from suspicious parties as well as from all other parties, wherein it was clearly observed that the suspicious purchases made were at a lower rate in comparison to all other purchases made during the year. And hence there is no intention of suppression of profit by the appellant. Even though the learned AO, without considering the above facts and explanations of the appellant, disallowed in his own accord 25 percent of purchases made from the suspicious parties."

In this regard, the Ld. Sr. DR submitted that this issue of obtaining benefits through bogus purchase bills by rice millers is sub-judice before the Hon’ble Jurisdictional High Court vide various cases filed before the said forum. She had submitted a list of the cases which are as follows: “1. Keshari Rice Industries (ITA No. 410/RPR/2024 dt. 23.12.2024) for the Asstt. Year 2016-17. 2. Kishore Kumar Panjwani (378/RPR/2024 dt. 08.10.2024) for the Asstt. Year 2014-15. 3. Arvind Kumar Agrawal-(51/RPR/2025 dt. 18.03.2025) for the Asstt. Year 2015-16. 4. Sandeep Agrawal-MA. No. 22/RPR/2019 dated 28.05.2024 (Arising out of ITA No. 16/RPR/2016) for the Asstt. Year 2010-11. 5. Sudhir Kumar Bansal (Filed recently Limitation 11.12.2025)

4 Pawan Kingrani Vs. ITO, Bhatapara (C.G.) ITA No.279/RPR/2026

Gurunanak Rice Industries - (ITA 370/RPR/2024 dt. 02.09.2024) for the Asstt. Year 2015-16.”

That on similar parameter, the ITAT, SMC Bench, Raipur in the case of Vinod Kumar Agrawal Vs. ITO, Raipur, ITA No.630/RPR/2025, A.Y.2016-17, dated 11.12.2025 has held and observed as follows:

“2. Parties herein submitted that the issue pertains to the fact that the assessee herein is a rice miller and that as alleged by the Department he had obtained the benefit of bogus purchase bills from various agents and hence, the bogus purchase amount @ Rs.25% was added to the total income of the assessee. In this regard, Ld. Sr. DR submitted that this this issue of obtaining benefits through bogus purchase bills by rice millers is sub- judice before the Hon’ble Jurisdictional High Court vide various cases filed before the said forum. She had submitted a list of the cases which are as follows: “1. Keshari Rice Industries (ITA No. 410/RPR/2024 dt. 23.12.2024) for the Asstt. Year 2016-17. 2. Kishore Kumar Panjwani (378/RPR/2024 dt. 08.10.2024) for the Asstt. Year 2014-15. 3. Arvind Kumar Agrawal-(51/RPR/2025 dt. 18.03.2025) for the Asstt. Year 2015-16. 4. Sandeep Agrawal-MA. No. 22/RPR/2019 dated 28.05.2024 (Arising out of ITA No. 16/RPR/2016) for the Asstt. Year 2010-11. 5. Sudhir Kumar Bansal (Filed recently Limitation 11.12.2025) 6. Gurunanak Rice Industries - (ITA 370/RPR/2024 dt. 02.09.2024) for the Asstt. Year 2015-16.” 3. In this scenario, it would not be appropriate for this Bench to determine the facts and circumstances pertaining to the said additions on issue of procurement of bogus purchase bills by the assessee. At the same time, it would also not serve any logical purpose by keeping the matter pending at this level and therefore, it would be most appropriate that the said matter be remanded back to the file of the CIT(A)/NFAC and that the first appellate authority

5 Pawan Kingrani Vs. ITO, Bhatapara (C.G.) ITA No.279/RPR/2026

shall wait for the decision of the Hon’ble Jurisdictional High Court in the aforestated matters on the issue stated herein, and thereafter shall adjudicate denovo as per law while complying with the principles of natural justice. 4. That even without going into the merits of the matter on consideration of facts that the effective issue in this matter is already subjudice before the Hon’ble Jurisdictional High Court, the same is therefore, restored to the file of the CIT(A)/NFAC, as per the aforestated directions. The order of CIT(A)/NFAC is set-aside accordingly. 5. Before parting, it is made clear that this remanding of the matter to the file of the CIT(A)/NFAC shall not alter/amend any factual scenario pertaining to the case of the assessee. The facts and circumstances of the case and the point of law has to be decided afresh only after the decision by the Hon’ble Jurisdictional High Court as per its order, which shall be the main guideline while deciding this case by the first appellate authority. 6. As per the above terms, the grounds of appeal by the assessee stands allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes.”

Respectfully following the aforesaid judicial pronouncement, on same parity of reasoning and while maintaining rule of consistency as per similar terms, I set aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file with similar direction as recorded in ITA No.630/RPR/2025 (supra).

6 Pawan Kingrani Vs. ITO, Bhatapara (C.G.) ITA No.279/RPR/2026

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 22nd day of April, 2026.

Sd/- (PARTHA SARATHI CHAUDHURY) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 22nd April, 2026. SB, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, रायपुर / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 5.

आदेशानुसार / BY ORDER, Digitally signed Samiran by Samiran Bera, Sr. PS, Bera, Sr. // True Copy // ITAT, Raipur PS, ITAT, Date: Senior Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur 2026.04.22 Raipur 15:13:11 +05'30'

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