ADHIRAJ CEMENT, RAIPUR,RAIPUR vs. DCIT, CIRCLE-1(1), RAIPUR, RAIPUR

Since, the issue involved is same, for the sake of convenience, these two appeals were heard together and are disposed of by this common order.

First, we shall take up the appeal in ITA No.77/RPR/2026 for AY 2022-23.

We have heard both the parties and perused the records. In this case, the assessee had filed return of income for AY 2022-23 on 21.10.2022 u/s 139(1) of the Act declaring total income at Rs.16,07,430/-. As per the assessment order, turnover of the assessee was Rs.29,25,80,715/- and gross profit was Rs.1,22,42,601/-. The assessee’s case was selected for scrutiny as per CASS. One of the reasons for selection was information received from CBIC regarding bogus Input Tax Credit (ITC). Various notices were issued to the assessee. The assessee filed replies. The Assessing Officer (AO) made addition of Rs.1,16,59,217/-. In the assessment order, the AO held that purchases made from United Ispat of Rs.9,32,73,738/- were not genuine, hence, the AO added gross profit at 12.5% of Rs.9,32,73,738/-. Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A).

It was pleaded before the Ld. CIT(A) that the assessee had furnished a reply on 22.03.2024 during the assessment proceedings which was not considered by the AO. However, the Ld. CIT(A) held as under : “The factual matrix clearly shows that the appellant has not placed any substantive material either at the assessment stage or in appellate proceedings to counter the AO's findings. The absence of supporting evidence, the failure to rebut the AO's observations, and the lack of any alternate computation leave no basis to interfere with the estimation made by the AO. The appellant's allegations remain unsubstantiated, and the estimation is consistent with the situation where complete verification could not be undertaken.

Aggrieved by the order of the Ld. CIT(A), the assessee filed an appeal before the Tribunal.

On perusal of the order of the Ld. CIT(A), it is evident that the Ld. CIT(A) merely confirmed the assessment order alleging that assessee failed to file details.

It is important to understand that the assessee had pleaded before the Ld. CIT(A) that the assessee’s reply dated 22.03.2024 was not considered by the AO. We have also noted that during the assessment proceedings, the assessee had made a reference to Pr. Commissioner, CGST. The reply received from Superintendent vide letter dated 16.09.2022 has been reproduced by the AO in the assessment order wherein the Superintendent had stated that the investigation in the case of Adhiraj Cements still going on and not reached finality.

We have already mentioned that one of the reasons for scrutiny selection of the assessee’s case was information received from CBIC regarding bogus ITC claims. We have noted that the CGST Department had not arrived at a final decision regarding alleged bogus ITC claim when assessment was finalized.

Taking into consideration all the above facts, we set aside the assessment order to the AO for de-novo adjudication. The AO shall provide opportunity to the assessee. The assessee shall be allowed to file all the necessary details. Accordingly, the appeal in ITA No. 77/RPR/2026 for AY 2022-23 is allowed for statistical purpose.

In this case, the assessee had filed paper book which contained documents filed before the AO and the Ld. CIT(A). The assessee also field copy of decision in the case of CIT Vs. Orisa Corporation Ltd. and CIT Vs. Korlay Trading Company Ltd.

In this case, the assessee claimed that the assessee had filed copies of e-way bills and transportation documents to prove the alleged purchases. Copies of these documents are at pages 86-688 of the paper book. However, the AO at page 54 of the assessment order has mentioned as under which is reproduced here as under : “(c) In response to notice u/s 142(1) of the IT Act, dated 14.02.2025, in its reply dated 28.02.2025 with regard to furnishing of e-way bills, vehicle number and delivery challan / builty of the transactions made with above mentioned nine parties, the assessee submitted that all of the transactions were entered EX-Factory i.e. the buyer has lifted the material from the premises of the assessee, hence, the related copies of e-way-bills, builty etc are not available with the assessee. In this connection it is stated that the e-way is required to transport all the goods except exempted under the notification or rules. E-Way bill

Thus, the AO in the assessment order stated that e-way bills were not produced. However, we have already mentioned that copies of e-way bills have been filed by the assessee in the paper book with the certificate that those were filed before the AO. In the assessment order, the AO had also referred to the information received from the CBIC regarding bogus ITC claims. We have already mentioned in ITA No. 77/RPR/2026 that as per the Superintendent, CGST, the investigating related to ITC claims was not completed at that point of time. The assessee claims that it had filed e-way bills. In these facts and circumstances of the case, the CGST is the appropriate

In these facts and circumstances of the case for all the reasons discussed above, we set aside to the assessment order to the AO for de-novo adjudication. The AO shall provide opportunity to the assessee and also obtain the information from Pr. Commissioner, CGST. The assessee shall be allowed to file all the necessary documents. Accordingly, the appeal in ITA No. 78/RPR/2026 is allowed for statistical purpose.

In the result, both the appeals of the assessee are allowed for statistical purpose.