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Before: Ms. KAVITHA RAJAGOPAL & SHRI PRABHASH SHANKAR
PER PRABHASH SHANKAR [A.Μ.] :- The present appeal arising from the appellate order dated 10.02.2025 is filed by the Revenue against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)"] pertaining to assessment order passed u/s.143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 22.09.2021 for the Assessment Year [A.Y.] 2018-19. M/s V.D. POP & Display LLP, Plot No. 44/45, Village Pehlar NH-8, Vasai, Nallasopara East, District Palghar, Mira Bhyandar 401209, Maharashtra
The grounds of appeal are as under:-
Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in the disallowance of bogus purchases of Rs.5,21,484/- added by the Assessing Officer in order u/s 143(3) of the IT Act.?
Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in overlooking the explicit finding of the Directorate of Investigation, Kolkata that the assessee has undertaken various transactions with 2 parties i.e. M/s. Clear Polyplast and M/s. Shri Mathuresh Polyplast which were engaged in the bogus transitions through bogus billings?
Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in the disallowance not considering the fact that the assessee also failed to prove the identity and genuineness of the transactions/parties during the Assessment proceedings?
Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in not appreciating the fact that the Human Probability Test applied in this case and false claims of the assessee cannot sustain before the test of Human Probability.
The appellant craves leave to add, amend, alter substitute or modify any of the above grounds or add a fresh ground as and when found necessary either before or at the time of hearing.
Brief facts of the case are that the assessee Firm filed its return of income for the year declaring total income of Rs.76,16,260/-. The case was selected under compulsory manual selection of returns for complete scrutiny based on the information received from DDIT(Inv.), Kolkata, that the assessee had evaded tax in form of bogus billing to the tune of Rs.69,81,772/- during the relevant year. Subsequently, notices u/s.143(2) and notices u/s.142(1) dated along with questionnaire were issued from time to time. The assessee filed submissions but the AO did not find any satisfactory reply or justification for the purchases to the extent of Rs.5,21,484/- and treated it as bogus purchase u/s.69C of the Act as unexplained expenditure.
In the subsequent appeal before the ld.CIT(A), the assessee submitted that the addition made by the AO of Rs.5,21,484/-pertained to the purchases from two parties viz. M/s. Clear Poly Plast amounting to Rs.98,454/- and from Shri Mathuresh Polyplast amounting to Rs.4,23,030/-. With reference to the purchases made from M/s. Clear Poly Plast, the assessee submitted copy of ledger in its books duly signed and stamped by the said supplier, copy of original invoices and copy of bank statement highlighting the payments made to them. With reference to the purchases made from Shri Mathuresh Poly Plast, it submitted copy of ledger confirmation duly signed and stamped by the vendor, invoices of the pre-GST period which proved that the vendor agreed to the purchases made by the assessee from them and copy of bank statement highlighting the payments made to them. In view of above evidences, the ld.CIT(A) directed the AO to delete the addition made amounting Rs.5,21,484/-.
We find that the AO has discussed the above issue stating that there were certain discrepancies in the figures of sales and purchases in the accounts of the assessee and above two concernes. He also refers to the explanations given by the assessee in these regard from time to time. He did not make any adverse observation in respect of the copies of invoices, banking details etc. filed by the assessee. Even the notices issued u/s 133(6) of the Act were duly complied with above parties. He has also referred to submissions dated 20.09.2021 and 04.09.2021 as per para 8.2 of the order. However, he did not make any adverse comments by simply stating that these were examined. As such, the assessment order is silent on these replies. As regards the differences in sales/purchase figures, it appears that the same were on account of GST figures. It may be stated here that the AO picked up the case for scrutiny on the information of bogus purchases amounting to Rs 69.81 lakh but restricted the addition to the extent of Rs 5.21 lakh only. Therefore, the assessee was not found indulging in bogus purchase as per the conclusion drawn by him. The ld.CIT(A) has taken due cognizance of the evidences adduced by the assessee before the AO and him. He noted that after going through the assessment order and also considering the assessee's submissions during the appellate proceedings that the it had submitted substantial evidence which included copy of Ledger, Copy of Bank Statement and Copy of ledger confirmation duly signed and stamped by the vendor for the purchase made of Rs.5,21,484/- which showed the genuineness of the purchase. Considering all the above facts, we do not find any infirmity in the conclusion drawn by him. We therefore, hold that he was justified in directing the AO to delete the impugned addition. The grounds of appeal by the Revenue are therefore dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 07.07.2025. KAVITHA RAJAGOPAL (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 07.07.2025 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/