SHREE BAIDYANATH AYURVED BHAWAN PRIVATE LIMITED ,KOLKATA vs. DCIT, CIRCLE 11(1), , KOLKATA

ITA 1032/KOL/2025Status: DisposedITAT Kolkata28 September 2026AY 2020-202132 pages
AI SummaryAllowed

What were the facts?

These are cross-appeals by Shree Baidyanath Ayurved Bhawan Private Limited (the assessee) and the Revenue against the orders of the National Faceless Appeal Centre, Delhi, for Assessment Years 2020-21 and 2021-22. The Revenue's appeals were filed with a delay of 140 days, which was condoned. The primary issues revolve around additions made by the Assessing Officer (AO) concerning bogus purchases, sale promotion expenses, and foreign travel expenses, and the subsequent partial deletions or confirmations by the CIT(A). The AO had made ad-hoc disallowances based on the non-response of certain suppliers to notices and the alleged lack of evidence for business expenditure.

What did the Tribunal hold?

The Tribunal decided on the issues as follows: Regarding bogus purchases (Issue 1): The Tribunal held that the assessee had discharged its onus by providing all necessary documents, including bills, confirmations, and GST details. The non-response of suppliers to Section 133(6) notices does not automatically make purchases bogus, especially when payments were made via account payee cheques and GST input credit was availed. The AO's ad-hoc disallowance was deemed unsustainable. The Tribunal relied on the principle that if the assessee provides sufficient evidence, the onus shifts, and the AO should utilize departmental machinery to verify if needed. The CIT(A)'s deletion was upheld. Regarding sale promotion expenses and foreign travel expenses (Issue 2): The Tribunal referred to its earlier decision in a related appeal (ITA No. 2692/KOL/2025 for AY 2021-22) where it had set aside the CIT(A)'s order and directed the AO to delete the entire addition of Rs. 33,63,43,852/- concerning sale promotion expenses and the entire addition of Rs. 7,52,011/- concerning foreign travel expenses. Therefore, the grounds related to these issues were allowed. Operative direction: The orders of the CIT(A) were set aside, and the AO was directed to delete the additions.

What were the issues?

1. Whether the CIT(A) erred in deleting the addition of Rs. 91,23,514/- on account of bogus purchases, ignoring that the genuineness of the purchase transactions was not established (Section 143(3) read with Section 144B)? - Assessee's contention: The assessee discharged its onus by furnishing all evidences, including bills, vouchers, GST details, and account payee cheque payments. It is not the assessee's responsibility to ensure suppliers respond to Section 133(6) notices. - Revenue's contention: The suppliers did not respond to the AO's Section 133(6) notices, rendering the purchases unverified. The CIT(A)'s deletion of the addition should be reversed. 2. Whether the CIT(A) erred in restricting additions on account of sale promotion expenses and foreign travel expenses, ignoring the lack of evidence for actual distribution of gold/silver coins and the business connection of foreign travel? - Assessee's contention: (Not explicitly recorded for this specific issue, but implied by the appeal against partial confirmation). - Revenue's contention: The assessee failed to provide cogent evidence for actual distribution of gold/silver coins and to establish the business connection for foreign travel expenses, making the expenditure not wholly and exclusively for business purposes.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 133(6),Section 40A(2),Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Dr. Kapil Goel, AR
For Respondent: Shri Sanat Kumar Raha, DR
Hearing: 30.06.2026Pronounced: 28.09.2026

Per Rajesh Kumar, AM:

These Cross appeals filed by the assessee and Revenue are against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 15.04.2025 & 16.04.2025 for the AYs2020-21 & 2021-22. ITA Nos. 1032, 1033, 2691 & 2692/KOL/2025 Shree Baidyanath Ayurved; A.Ys. 2020-21 & 2021-22

2.

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