INCOME TAX OFFICER, PIRAMAL CHAMBERS MUMBAI vs. BHARAT HIRALAL SHAH, MUMBAI

3. Whether on the facts and circumstances of the case, the Ld.

3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ CIT(A) has erred in deleting the addition of Rs. 14,60,201/ CIT(A) has erred in deleting the addition of Rs. 14,60,201/- being 12.5% of total purchases of Rs. 1,16,81,604/ 12.5% of total purchases of Rs. 1,16,81,604/- made by the AO on made by the AO on account of bogus purchases from 11 hawala traders, account of bogus purchases from 11 hawala traders, account of bogus purchases from 11 hawala traders, by ignoring the fact that during the Re the fact that during the Re-assessment Proceedings, the assessee assessment Proceedings, the assessee could neither produce the quantity tally of day to day purchases, could neither produce the quantity tally of day to day purchases, could neither produce the quantity tally of day to day purchases, Sales, Stocks, Delivery Challans and corresponding values nor Sales, Stocks, Delivery Challans and corresponding values nor Sales, Stocks, Delivery Challans and corresponding values nor could produce the parties for verification, in spit could produce the parties for verification, in spite of opportunity e of opportunity provided by the Assessing Officer?" provided by the Assessing Officer?" 4. ⁠4. Whether on the facts and circumstances of the case, the Ld. . Whether on the facts and circumstances of the case, the Ld. . Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purchases from 11 hawala traders, by ignoring account of bogus purchases from 11 hawala traders, by ignoring account of bogus purchases from 11 hawala traders, by ignoring the fact that the assessee has availed accommodation entries, but the fact that the assessee has availed accommodation entries, but the fact that the assessee has availed accommodation entries, but failed to prove the genuineness of the alleged transactions as well failed to prove the genuineness of the alleged transactions as well failed to prove the genuineness of the alleged transactions as well as creditworthiness of hawala traders from whom the alleged as creditworthiness of hawala traders from whom the alleged as creditworthiness of hawala traders from whom the alleged bogus purchases were purportedly made?" purchases were purportedly made?"

5. Whether on the facts and circumstances of the case, the Ld.

5. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being CIT(A) has erred in deleting the addition of Rs. 14,60,201/ being 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on 12.5% of total purchases of Rs. 1,16,81,604/ made by the AO on account of bogus purcha account of bogus purchases from 11 hawala traders/parties ses from 11 hawala traders/parties without appreciating the decision of the Hon'ble Supreme Court in without appreciating the decision of the Hon'ble Supreme Court in without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Gul) 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that 354, Dated. 16.01.2017, wherein the Hon'ble Court has held that when the purchases mo when the purchases mode are from bogus suppliers or concerns, the de are from bogus suppliers or concerns, the entire purchases are liable to disallowed ?" entire purchases are liable to disallowed ?"

Bharat Hiralal Shah 3 ITA No. 729/MUM/2025

7. Whether on the 7. Whether on the facts and circumstances of the case, the Ld. facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 14,60,201/ CIT(A) has erred in deleting the addition of Rs. 14,60,201/ CIT(A) has erred in deleting the addition of Rs. 14,60,201/-being 12.5% of total purchases of Rs. 1,16,81,604/ made on account of 12.5% of total purchases of Rs. 1,16,81,604/ made on account of 12.5% of total purchases of Rs. 1,16,81,604/ made on account of bogus bogus bogus purchases purchases purchases from from from 11 11 11 hawala hawala hawala traders/parties traders/parties traders/parties without without without appreciating the fact tha appreciating the fact that in the case of M/s. Swetamber Steels Ltd. t in the case of M/s. Swetamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the (Supra), the Hon'ble ITAT, Ahmadabad it had conformed the disallowance of the bogus purchase, by stating that the purchases disallowance of the bogus purchase, by stating that the purchases disallowance of the bogus purchase, by stating that the purchases shown from respective parties were found non shown from respective parties were found non- genuine and the genuine and the decision of the ITAT was u decision of the ITAT was upheld by Hon'ble Gujrat High Court and pheld by Hon'ble Gujrat High Court and also by the Hon'ble Supreme Court?" also by the Hon'ble Supreme Court?"

Bharat Hiralal Shah 4 specified in paragraph 3.1 (c) of the above stated Circular, wherein specified in paragraph 3.1 (c) of the above stated Circular, wherein specified in paragraph 3.1 (c) of the above stated Circular, wherein it is stated that in cases involving "Organized Tax Evasion", is stated that in cases involving "Organized Tax Evasion", is stated that in cases involving "Organized Tax Evasion", including cases of accommodation entries of bogus purchases, the including cases of accommodation entries of bogus purchases, the including cases of accommodation entries of bogus purchases, the decision to file appeal/SLP shall be taken on merit without regard to decision to file appeal/SLP shall be taken on merit without regard to decision to file appeal/SLP shall be taken on merit without regard to the tax effect and the the tax effect and the monetary limit.

Bharat Hiralal Shah 5 ITA No. 729/MUM/2025

3 CHI RAG STEEL CENTRE CHI RAG STEEL CENTRE 15,27,196/- 15,27,196/ 4 RELIABLE METAL ( INDIA) RELIABLE METAL ( INDIA) 12,10,112/- 12,10,112/ 5 JINALAY TRADING JINALAY TRADING 17,95,781/- 17,95,781/ 6 AVION SALES AVION SALES 26,18,303/- 26,18,303/ 7 RAJESHWATI TRADING RAJESHWATI TRADING 1,97,493/- 1,97,493/ 8 SIDDHIVINAYAK CORP SIDDHIVINAYAK CORP 4,992/- 4,992/ 9 NAKODA NAKODA TUBES 18,72,837/- 18,72,837/ 10 NAVKAR METAL NAVKAR METAL 23,18,468/- 23,18,468/ TOTAL 1,16,81,604/- 1,16,81,604/

5. On further appeal, the Ld. CIT(A) deleted the addition m On further appeal, the Ld. CIT(A) deleted the addition m On further appeal, the Ld. CIT(A) deleted the addition mainly for the two reasons, f for the two reasons, firstly, the Assessing Officer failed to undertake irstly, the Assessing Officer failed to undertake any independent verification including issue of notice u/s 133(6) of any independent verification including issue of notice u/s 133(6) of any independent verification including issue of notice u/s 133(6) of the Act, secondly, the Assessing Officer did not dispute the the Act, secondly, the Assessing Officer did not dispute the the Act, secondly, the Assessing Officer did not dispute the documentary evidence documentary evidences in support of purchases fi in support of purchases filed by the assessee. The relevant finding of the Ld. CIT(A) is reproduced as assessee. The relevant finding of the Ld. CIT(A) is reproduced as assessee. The relevant finding of the Ld. CIT(A) is reproduced as under:

Bharat Hiralal Shah 6 ITA No. 729/MUM/2025

“7.1 The sole ground of appeal taken by the appellant is that the The sole ground of appeal taken by the appellant is that the The sole ground of appeal taken by the appellant is that the learned Assessing Officer has made an addition of Rs. 14,60,201 learned Assessing Officer has made an addition of Rs. 14,60,201 learned Assessing Officer has made an addition of Rs. 14,60,201 being 12.5 percent of Rs 1,16,81,604 on ac being 12.5 percent of Rs 1,16,81,604 on account of unproved count of unproved purchases. The appellant’s submissions have been meticulously The appellant’s submissions have been meticulously The appellant’s submissions have been meticulously reviewed, and it is observed that the Assessing Officer (AO), in reviewed, and it is observed that the Assessing Officer (AO), in reviewed, and it is observed that the Assessing Officer (AO), in her order under section 143(3) read with section 147, assessed her order under section 143(3) read with section 147, assessed her order under section 143(3) read with section 147, assessed the appellant's total income at Rs. 16,81,680/ the appellant's total income at Rs. 16,81,680/-. This amount This amount included an addition of Rs. 14,60,201/ included an addition of Rs. 14,60,201/-, which represent 12.5% , which represent 12.5% of the appellant’s total purchases of Rs. 1,16,81,604/ of the appellant’s total purchases of Rs. 1,16,81,604/ of the appellant’s total purchases of Rs. 1,16,81,604/- from the impugned purchase parties. The AO attributed this addition to impugned purchase parties. The AO attributed this addition to impugned purchase parties. The AO attributed this addition to the purchases made from certain parties, which were d the purchases made from certain parties, which were d the purchases made from certain parties, which were deemed non-genuine and identified as "tainted" by the sales tax genuine and identified as "tainted" by the sales tax genuine and identified as "tainted" by the sales tax department and the Directorate General of Income Tax (DGIT) department and the Directorate General of Income Tax (DGIT) department and the Directorate General of Income Tax (DGIT) Investigation. 7.2 It is also observed that the appellant, during the assessment It is also observed that the appellant, during the assessment It is also observed that the appellant, during the assessment proceedings, has submitted comprehensive documentati proceedings, has submitted comprehensive documentati proceedings, has submitted comprehensive documentation to substantiate the genuineness of the transactions. These included substantiate the genuineness of the transactions. These included substantiate the genuineness of the transactions. These included the stock register, purchase bills/registers, lorry receipts, sale the stock register, purchase bills/registers, lorry receipts, sale the stock register, purchase bills/registers, lorry receipts, sale registers, and other supporting documents. Furthermore, the registers, and other supporting documents. Furthermore, the registers, and other supporting documents. Furthermore, the appellant provided PAN/TAN number of the alleged non appellant provided PAN/TAN number of the alleged non appellant provided PAN/TAN number of the alleged non-genuine parties, copies of purchase invoices from the alleged non parties, copies of purchase invoices from the alleged non parties, copies of purchase invoices from the alleged non-genuine suppliers, which were cross suppliers, which were cross-referenced with corresponding sale referenced with corresponding sale invoices and bank statements to demonstrate payments made to invoices and bank statements to demonstrate payments made to invoices and bank statements to demonstrate payments made to these suppliers via account payee cheques. Additionally, detail these suppliers via account payee cheques. Additionally, detail these suppliers via account payee cheques. Additionally, detailed information regarding the creditors was also submitted for information regarding the creditors was also submitted for information regarding the creditors was also submitted for verification. 7.3: These documents were also also presented presented to to the the AO AO during the assessment during the assessment proceedings and the appellant’s claims proceedings and the appellant’s claims were acknowledged and accepted by the AO in the assessment were acknowledged and accepted by the AO in the assessment were acknowledged and accepted by the AO in the assessment order. As per para 6.3 of the assessment order, the AO explicitly per para 6.3 of the assessment order, the AO explicitly per para 6.3 of the assessment order, the AO explicitly recorded: "The explanation offered by the assessee and the documentary "The explanation offered by the assessee and the documentary "The explanation offered by the assessee and the documentary evidence produced by the assessee has been carefully perused evidence produced by the assessee has been carefully perused evidence produced by the assessee has been carefully perused and considered. He has reiterated in his explanation that all the and considered. He has reiterated in his explanation that all the and considered. He has reiterated in his explanation that all the purchases are recorded in the books of account and subsequent urchases are recorded in the books of account and subsequent urchases are recorded in the books of account and subsequent item-wise sales of the goods purchased. He has also highlighted wise sales of the goods purchased. He has also highlighted wise sales of the goods purchased. He has also highlighted that the payments have been invariably made by account payee that the payments have been invariably made by account payee that the payments have been invariably made by account payee cheque. He also submitted that the availability of TAN and VAT cheque. He also submitted that the availability of TAN and VAT cheque. He also submitted that the availability of TAN and VAT numbers, coupled with bank account details, conclusively proves , coupled with bank account details, conclusively proves , coupled with bank account details, conclusively proves the identity of the supplier beyond doubt. the identity of the supplier beyond doubt. 7.4. Upon examining the assessment order, it is evident that the 7.4. Upon examining the assessment order, it is evident that the 7.4. Upon examining the assessment order, it is evident that the AO’s decision to treat these purchases as bogus was AO’s decision to treat these purchases as bogus AO’s decision to treat these purchases as bogus was was predominantly based on the information predominantly based on the information provided by the sales provided by the sales

Bharat Hiralal Shah 7 tax department and the DGIT (Investigation), which listed the tax department and the DGIT (Investigation), which listed the tax department and the DGIT (Investigation), which listed the suppliers as potentially fraudulent. However, the AO failed to suppliers as potentially fraudulent. However, the AO failed to suppliers as potentially fraudulent. However, the AO failed to undertake an undertake an independent investigation or verification to independent investigation or verification to substantiate the allegations of bogus purchases. No substantiate the allegations of bogus purchases. Notably, the AO tably, the AO did not invoke section 133(6) of the Income Tax Act to request did not invoke section 133(6) of the Income Tax Act to request did not invoke section 133(6) of the Income Tax Act to request information directly from the suppliers, which would have been a information directly from the suppliers, which would have been a information directly from the suppliers, which would have been a crucial step in verifying the authenticity of the transactions. This crucial step in verifying the authenticity of the transactions. This crucial step in verifying the authenticity of the transactions. This oversight in conducting due diligence raises oversight in conducting due diligence raises significant concerns significant concerns regarding the thoroughness of the assessment process regarding the thoroughness of the assessment process regarding the thoroughness of the assessment process. 7.5 Further, the AO did not dispute any of the documentary 7.5 Further, the AO did not dispute any of the documentary 7.5 Further, the AO did not dispute any of the documentary evidence provided by the appellant. Despite this, the AO evidence provided by the appellant. Despite this, the AO evidence provided by the appellant. Despite this, the AO concluded that the purchases should be treated as bogus solely concluded that the purchases should be treated as bogus solely concluded that the purchases should be treated as bogus solely because the appellant was unable to produce the suppliers cause the appellant was unable to produce the suppliers cause the appellant was unable to produce the suppliers before him. This conclusion is problematic because, if the before him. This conclusion is problematic because, if the before him. This conclusion is problematic because, if the purchases were recorded in the books and the corresponding purchases were recorded in the books and the corresponding purchases were recorded in the books and the corresponding sales were not challenged, the authenticity of these records sales were not challenged, the authenticity of these records sales were not challenged, the authenticity of these records should, by implicatio should, by implication, have been accepted. Therefore, the AO’s n, have been accepted. Therefore, the AO’s decision to reject the purchases as bogus based on the failure to decision to reject the purchases as bogus based on the failure to decision to reject the purchases as bogus based on the failure to produce the suppliers directly contradicts the findings and produce the suppliers directly contradicts the findings and produce the suppliers directly contradicts the findings and acceptance of the documentary evidence. acceptance of the documentary evidence.” 5.1 Further, the Ld. CIT(A) held that the Asse the Ld. CIT(A) held that the Assessing Officer did not ssing Officer did not provide opportunity of cross provide opportunity of cross-examination of the suppliers and the examination of the suppliers and the Assessing Officer proceeded to make the addition solely of the Assessing Officer proceeded to make the addition solely of the Assessing Officer proceeded to make the addition solely of the inability of the assessee to produce those y of the assessee to produce those supplier suppliers. The relevant part of his decision is reproduced as part of his decision is reproduced as under:

“7.7 Therefore, the appellant has successfully discharged the Therefore, the appellant has successfully discharged the Therefore, the appellant has successfully discharged the onus of proving the identity and genuineness of the disputed onus of proving the identity and genuineness of the disputed onus of proving the identity and genuineness of the disputed purchases. The documentary evidence presented purchases. The documentary evidence presented — — including PAN/TAN of the parties, stock registers, purchase and sale PAN/TAN of the parties, stock registers, purchase and sale PAN/TAN of the parties, stock registers, purchase and sale invoices, and bank payment records and bank payment records — adequately demonstrates adequately demonstrates the legitimacy of the transactions. It is important to note that the the legitimacy of the transactions. It is important to note that the the legitimacy of the transactions. It is important to note that the purchases were made approximately seven years ago, and the purchases were made approximately seven years ago, and the purchases were made approximately seven years ago, and the AO’s failure to account for this temporal gap when assessing the AO’s failure to account for this temporal gap when assessing the AO’s failure to account for this temporal gap when assessing the evidence is another significant oversight. Moreover, the AO’s another significant oversight. Moreover, the AO’s another significant oversight. Moreover, the AO’s refusal to supply the copy of statements recorded by the Sales refusal to supply the copy of statements recorded by the Sales refusal to supply the copy of statements recorded by the Sales Tax authorities on the basis of which the reason to believe was Tax authorities on the basis of which the reason to believe was Tax authorities on the basis of which the reason to believe was formed and allow cross formed and allow cross-examination of the suppliers, despite the examination of the suppliers, despite the appellant’s explicit request during the assessment proceedings, xplicit request during the assessment proceedings, xplicit request during the assessment proceedings, constitutes a violation of the principles of natural justice, which constitutes a violation of the principles of natural justice, which constitutes a violation of the principles of natural justice, which Bharat Hiralal Shah 8 demand a fair opportunity for the appellant to challenge the demand a fair opportunity for the appellant to challenge the demand a fair opportunity for the appellant to challenge the allegations. 7.7 At this point it is beyond doubt that the appellant has At this point it is beyond doubt that the appellant has At this point it is beyond doubt that the appellant has provided substantial documentary evidence that was accepted vided substantial documentary evidence that was accepted vided substantial documentary evidence that was accepted by the AO, yet the AO proceeded to make the addition based by the AO, yet the AO proceeded to make the addition based by the AO, yet the AO proceeded to make the addition based solely on the inability of the appellant to produce the suppliers. solely on the inability of the appellant to produce the suppliers. solely on the inability of the appellant to produce the suppliers. This action was not only inconsistent with the accepted This action was not only inconsistent with the accepted This action was not only inconsistent with the accepted documentary evide documentary evidence but also contrary to the established nce but also contrary to the established judicial precedents. The AO’s decision to treat the purchases as judicial precedents. The AO’s decision to treat the purchases as judicial precedents. The AO’s decision to treat the purchases as bogus without any concrete basis or independent verification is bogus without any concrete basis or independent verification is bogus without any concrete basis or independent verification is erroneous. Given the comprehensive evidence presented by the appellant, Given the comprehensive evidence presented by the appellant, Given the comprehensive evidence presented by the appellant, the lack of cr the lack of cross- examination of the suppliers, and the examination of the suppliers, and the established judicial guidelines, it is clear that the addition of Rs. established judicial guidelines, it is clear that the addition of Rs. established judicial guidelines, it is clear that the addition of Rs. 14,60,201 made by the AO was without merit. 14,60,201 made by the AO was without merit. For the reasons outlined above, the addition of Rs. 14,60,201/ For the reasons outlined above, the addition of Rs. 14,60,201/ For the reasons outlined above, the addition of Rs. 14,60,201/- is hereby deleted, and the appeal is "Allowed".” hereby deleted, and the appeal i 6. We have heard the learned counsel for the parties and We have heard the learned counsel for the parties and We have heard the learned counsel for the parties and carefully perused the material placed on record. The contentions carefully perused the material placed on record. The contentions carefully perused the material placed on record. The contentions advanced on behalf of the assessee are twofold. First, it is urged advanced on behalf of the assessee are twofold. First, it is urged advanced on behalf of the assessee are twofold. First, it is urged that the assessee had furnished all documents in support of the that the assessee had furnished all documents in that the assessee had furnished all documents in purchases in question, including purchase bills, entries in the purchases in question, including purchase bills, entries in the purchases in question, including purchase bills, entries in the registered purchase register, stock register, and evidence of registered purchase register, stock register, and evidence of registered purchase register, stock register, and evidence of payment through banking channels. It is submitted that the payment through banking channels. It is submitted that the payment through banking channels. It is submitted that the learned CIT(A) has recorded that such documents were produced learned CIT(A) has recorded that such documents were pro learned CIT(A) has recorded that such documents were pro before the Assessing Officer, though the assessment order contains before the Assessing Officer, though the assessment order contains before the Assessing Officer, though the assessment order contains no reference to the production of such records. no reference to the production of such records.

6.1 Be that as it may, the core issue in matters involving “hawala” Be that as it may, the core issue in matters involving “hawala” Be that as it may, the core issue in matters involving “hawala” or accommodation purchase bills does not turn upon the mere or accommodation purchase bills does not turn upon the mere or accommodation purchase bills does not turn upon the mere existence of invoices, purchase registers, stock records, or proof of ce of invoices, purchase registers, stock records, or proof of ce of invoices, purchase registers, stock records, or proof of Bharat Hiralal Shah 9 payment by cheque. The real question is whether the alleged payment by cheque. The real question is whether the alleged payment by cheque. The real question is whether the alleged supplier parties had, in fact, effected delivery of the goods to the supplier parties had, in fact, effected delivery of the goods to the supplier parties had, in fact, effected delivery of the goods to the assessee. The statutory onus rests squarely upon the assessee to assessee. The statutory onus rests squarely upon the assessee to assessee. The statutory onus rests squarely upon the assessee to establish the genuineness of the purchases by producing credible establish the genuineness of the purchases by producing credible establish the genuineness of the purchases by producing credible evidence of actual delivery of goods corresponding to the invoices evidence of actual delivery of goods corresponding to the invoices evidence of actual delivery of goods corresponding to the invoices recorded in the books of account. recorded in the books of account.

6.2 In the present case, no documentary proof of transportation or In the present case, no documentary proof of transportation or In the present case, no documentary proof of transportation or any expenditure relata any expenditure relatable to the movement of the goods has been ble to the movement of the goods has been placed on record, either before the Assessing Officer or before the placed on record, either before the Assessing Officer or before the placed on record, either before the Assessing Officer or before the learned CIT(A). In the absence of such evidence, the deletion of the learned CIT(A). In the absence of such evidence, the deletion of the learned CIT(A). In the absence of such evidence, the deletion of the addition by the learned CIT(A) merely on the premise that addition by the learned CIT(A) merely on the premise that addition by the learned CIT(A) merely on the premise that documentary records documentary records such as invoices and registers were available, such as invoices and registers were available, and that the assessee had thus discharged his onus, cannot be and that the assessee had thus discharged his onus, cannot be and that the assessee had thus discharged his onus, cannot be sustained in law.

6.3 The second reasoning advanced by the learned CIT(A) is that The second reasoning advanced by the learned CIT(A) is that The second reasoning advanced by the learned CIT(A) is that the Assessing Officer conducted no independent inquiry and merely the Assessing Officer conducted no independent inquiry and merel the Assessing Officer conducted no independent inquiry and merel relied upon information from the Sales Tax Department, without relied upon information from the Sales Tax Department, without relied upon information from the Sales Tax Department, without issuing notices under section 133(6) of the Act. This contention is issuing notices under section 133(6) of the Act. This contention is issuing notices under section 133(6) of the Act. This contention is equally untenable. The assessment order records that the Assessing equally untenable. The assessment order records that the Assessing equally untenable. The assessment order records that the Assessing Officer specifically called upon the assessee to produce the supplier Officer specifically called upon the assessee to produce Officer specifically called upon the assessee to produce parties, along with their books of account, for verification. The parties, along with their books of account, for verification. The parties, along with their books of account, for verification. The assessee expressed his inability to do so, stating that the said assessee expressed his inability to do so, stating that the said assessee expressed his inability to do so, stating that the said parties were not traceable at their known addresses. Even when parties were not traceable at their known addresses. Even when parties were not traceable at their known addresses. Even when

Bharat Hiralal Shah 10 called upon to furnish the latest addresses of t called upon to furnish the latest addresses of these parties, the hese parties, the assessee failed to do so. assessee failed to do so.

6.4 In such circumstances, the Assessing Officer cannot be faulted In such circumstances, the Assessing Officer cannot be faulted In such circumstances, the Assessing Officer cannot be faulted for not issuing notices under section 133(6) of the Act, for when the for not issuing notices under section 133(6) of the Act, for when the for not issuing notices under section 133(6) of the Act, for when the assessee himself admits that the parties are untraceable and fails to assessee himself admits that the parties are untraceable and fails to assessee himself admits that the parties are untraceable and fails to provide any current address, the issuance of such notices would be de any current address, the issuance of such notices would be de any current address, the issuance of such notices would be an exercise in futility. The law is well an exercise in futility. The law is well-settled that the parties from settled that the parties from whom the assessee claims to have made purchases are his own whom the assessee claims to have made purchases are his own whom the assessee claims to have made purchases are his own witnesses, and the primary onus lies upon the assessee to produce witnesses, and the primary onus lies upon the assessee to produ witnesses, and the primary onus lies upon the assessee to produ them for verification. The plea that cross them for verification. The plea that cross-examination ought to have examination ought to have been provided is equally misconceived, for such a right does not been provided is equally misconceived, for such a right does not been provided is equally misconceived, for such a right does not arise where the assessee fails to produce his own suppliers for arise where the assessee fails to produce his own suppliers for arise where the assessee fails to produce his own suppliers for examination in the first instance. examination in the first instance. Therefore, to hold t Therefore, to hold that the Assessing Officer violating principle of natural justice by way of not Assessing Officer violating principle of natural justice by way of not Assessing Officer violating principle of natural justice by way of not provided cross-examination is contrary to the law. examination is contrary to the law. In view of above, In view of above, this reasoning of the Ld. CIT(A) is also not justified We are, this reasoning of the Ld. CIT(A) is also not justified this reasoning of the Ld. CIT(A) is also not justified therefore, of the considered view that both t therefore, of the considered view that both the principal grounds he principal grounds relied upon by the learned CIT(A) for deleting the addition are relied upon by the learned CIT(A) for deleting the addition are relied upon by the learned CIT(A) for deleting the addition are unsustainable in law unsustainable in law 6.5 Further, the Ld. CIT(A) himself was having authority to carry Further, the Ld. CIT(A) himself was having authority to carry Further, the Ld. CIT(A) himself was having authority to carry out investigations or provide opportunity of cross out investigations or provide opportunity of cross- -examination to the assessee or pr the assessee or providing relevant material gathered by the oviding relevant material gathered by the Assessing Officer but he failed in doing so. Assessing Officer but he failed in doing so. Further, we find that the Further, we find that the Jansampark Hon’ble Hon’ble Hon’ble Delhi Delhi Delhi High High High Court Court Court in in in the the the case case case of of of Bharat Hiralal Shah 11 Advertising and marketing P Ltd in and marketing P Ltd in ITA 525/2014 has held that ITA 525/2014 has held that if the assessing officer if the assessing officer fails in carrying out the enquiries which are fails in carrying out the enquiries which are required in the matter, then the Ld. CIT(A) is under obligation to required in the matter, then the Ld. CIT(A) is under obligation to required in the matter, then the Ld. CIT(A) is under obligation to carry out such enquires and he cannot sit ideal and allow relief to carry out such enquires and he cannot sit ideal and allow relief to carry out such enquires and he cannot sit ideal and allow relief to the either of party. The relevant part of decision is reproduced as the either of party. The relevant part of decision is reproduced as the either of party. The relevant part of decision is reproduced as under:

6.6 Further, the learned Departmental Representative relied upon he learned Departmental Representative relied upon he learned Departmental Representative relied upon the judgment of the Hon’ble Bombay High Court in e Hon’ble Bombay High Court in e Hon’ble Bombay High Court in Kanak Impex (India) Ltd in ITA 791 of 2021 (India) Ltd in ITA 791 of 2021 contending that the ratio thereof contending that the ratio thereof squarely applies to the facts of the present case. The learned squarely applies to the facts of the present case. The learned squarely applies to the facts of the present case. The learned

Bharat Hiralal Shah 12 counsel for the assessee, however, sought to distinguish the said counsel for the assessee, however, sought to distinguish the said counsel for the assessee, however, sought to distinguish the said decision by submitting that in decision by submitting that in Kanak Kanak Impex Impex (supra), no documentary evidence in support of the purchases had been filed, documentary evidence in support of the purchases had been filed, documentary evidence in support of the purchases had been filed, whereas in the present case, the assessee has produced all whereas in the present case, the assessee has produced all whereas in the present case, the assessee has produced all documents such as purchase bills, sales register entries, stock uch as purchase bills, sales register entries, stock uch as purchase bills, sales register entries, stock register and proof of payment through banking channels. register and proof of payment through banking channels. register and proof of payment through banking channels.

6.7 In our considered opinion, the fact whether or not certain In our considered opinion, the fact whether or not certain In our considered opinion, the fact whether or not certain documents like purchase bills, sales bills or stock register entries documents like purchase bills, sales bills or stock register entries documents like purchase bills, sales bills or stock register entries were filed is not, by itself, a determinative factor. The essence of the ot, by itself, a determinative factor. The essence of the ot, by itself, a determinative factor. The essence of the judgment of the Hon’ble Bombay High Court in Kanak Impex judgment of the Hon’ble Bombay High Court in judgment of the Hon’ble Bombay High Court in (supra) lies in the principle that where the appellate authority has (supra) lies in the principle that where the appellate authority has (supra) lies in the principle that where the appellate authority has accepted that the bills in dispute are merely paper transactions accepted that the bills in dispute are merely paper transactions accepted that the bills in dispute are merely paper transactions unsupported by actual delivery of goods, yet the sales are not rted by actual delivery of goods, yet the sales are not rted by actual delivery of goods, yet the sales are not doubted, it must necessarily follow that the assessee had procured doubted, it must necessarily follow that the assessee had procured doubted, it must necessarily follow that the assessee had procured goods from unrecorded sources goods from unrecorded sources—typically from the grey market typically from the grey market—for effecting such sales. In such a case, the source of the goods effecting such sales. In such a case, the source of the goods effecting such sales. In such a case, the source of the goods purchased in cash from the grey market remains unexplained. sed in cash from the grey market remains unexplained. sed in cash from the grey market remains unexplained.

6.8 When the assessee fails to adduce cogent evidence of the When the assessee fails to adduce cogent evidence of the When the assessee fails to adduce cogent evidence of the delivery of goods corresponding to the purchase bills recorded in delivery of goods corresponding to the purchase bills recorded in delivery of goods corresponding to the purchase bills recorded in the books of account, the mere production of documents such as the books of account, the mere production of documents such as the books of account, the mere production of documents such as invoices, ledger entries, or stock register details serves little dger entries, or stock register details serves little dger entries, or stock register details serves little purpose. Absent credible proof of transportation, delivery challans, purpose. Absent credible proof of transportation, delivery challans, purpose. Absent credible proof of transportation, delivery challans, weighment slips or similar evidence, the so weighment slips or similar evidence, the so-called purchase bills called purchase bills

Bharat Hiralal Shah 13 assume the character of mere book entries without corresponding assume the character of mere book entries without corresponding assume the character of mere book entries without corresponding physical movement of goods. sical movement of goods.

6.9 In light of the foregoing discussion, and applying the ratio of In light of the foregoing discussion, and applying the ratio of In light of the foregoing discussion, and applying the ratio of Kanak Impex (supra) to the facts at hand, we are unable to sustain (supra) to the facts at hand, we are unable to sustain (supra) to the facts at hand, we are unable to sustain the findings of the lower appellate authority. We accordingly set the findings of the lower appellate authority. We accordingly set the findings of the lower appellate authority. We accordingly set aside the impugned orders and aside the impugned orders and restore the matter to the file of the restore the matter to the file of the Assessing Officer for de novo adjudication in accordance with law, Assessing Officer for de novo adjudication in accordance with law, Assessing Officer for de novo adjudication in accordance with law, after affording due opportunity of hearing to the assessee. The after affording due opportunity of hearing to the assessee. The after affording due opportunity of hearing to the assessee. The grounds raised by the Revenue are accordingly stand allowed. grounds raised by the Revenue are accordingly stand allowed. grounds raised by the Revenue are accordingly stand allowed.