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Facts
The assessee, a builder and developer, filed a return declaring a loss. Based on information regarding accommodation entries, the AO added back Rs.18,23,600/- as unexplained expenditure. The assessee contested this, pointing out a discrepancy in the purchase amount for M/s Krishna Structural Steel (India).
Held
The Tribunal observed that the CIT(A) passed an ex-parte order, denying the assessee a reasonable opportunity to present evidence. The Tribunal held that the matter deserved to be remanded to the CIT(A) for fresh consideration and specific examination of the purchase claim.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without granting a reasonable opportunity to the assessee, and whether the disallowance of purchase expenditure was justified without proper verification.
Sections Cited
250, 143(3), 139(1), 142(1), 69C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
The instant appeal of the assessee was filed against the order of the Learned Commissioner of Income-tax (Appeals)-51, Mumbai, [for brevity, ‘Ld.CIT(A)]passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act;), date of order 18/11/2024. The impugned order emanated from the order of the Learned Income-tax Officer 32(2)(3), Mumbai*for brevity, the “Ld. AO”+ passed under section 143(3), date of order 20/03/2015.
2 ITA 276/Mum/2025 Maa Ashapura Developers 2. The brief facts of the case are that the assessee filed the return under section 139(1) by declaring loss of Rs. 40,80,924/-. The assessee is a partnership firm and involved in business of builders and developers. Subsequently, based on the information received from the DGIT(Inv), Mumbai with respect to dealers providing accommodation entries by issuing bogus bills without supply of any goods, the notice under section 142(1) was issued. Finally, the Ld.AO found that the assessee had purchased from different parties total amountto Rs.18,23,600/-, which was added back under section 69C by treating it as unexplained expenditure. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld.CIT(A) passed an expert order and upheld the impugned assessment order. Being aggrieved on the impugned appeal order, the assessee filed an appeal before us.
The assessee filed a paper book spanning pages 1 to 112, which is placed on the records. The Ld.AR argued that the appeal order was passed exparte and without considering the submission of the assessee, the order was passed. The Ld.AR also stated that the purchases from M/s Krishna Structural Steel (India) was noted by the Ld.AO in the assessment order amount to Rs.9,09,328/- instead of the correct amount of purchase at Rs.94,999/-. The relevant bill is placed at APB page 106. The relevant part of the assessment order, paragraph 4 is extracted below:- “4. During the course of assessment proceedings, the assessee was asked to furnish the details of purchases made during the year under consideration along with VAT / TIN No. In response, the assessee has furnished the details of all the parties along with VAT No.. from whom, the purchases were made. The VAT numbers furnished by the assessee have been verified with the information received from the office of DGIT (Inv), Mumbai about the parties, who are engaged in the business of accommodation entries without actual delivery of goods in exchange of cash
3 ITA 276/Mum/2025 Maa Ashapura Developers on commission basis. It is found that the assessee has introduced accommodation entries by way of bogus purchases from the following parties:- Sr.No. Name of the party VAT / TIN Amount (Rs.) 1 M/s Orient Cement 27770246923V 5695736 2 M/s Dhanlaxmi Enterprises 27600222233V 18245 3 M/s Pooja Marble & Granite 27250276503V 253367 4 M/s Priti Sales Corporation 27450176192V 35254 5 M/s Arihant Traders 27230613104V 11670 6 M/s Krishna Structural Steel (India) 27050771410V 909328 TOTAL 1823600 The Ld.AR submitted a rectified chart and the said purchase amount is amended. The said chart is reproduced as below:-
Sr.No. Name of the party Amount (Rs.) 1 M/s Orient Cement 5,95,736 2 M/s Dhanlaxmi Enterprises 18,245 3 M/s Pooja Marble & Granite 2,53,367 4 M/s Priti Sales Corporation 35,254 5 M/s Arihant Traders 11,670 6 M/s Krishna Structural Steel (India) 94,999 Total 10,09,271
The Ld. DR supported the findings of the revenue authorities and argued in favour of the departmental stand. However, the Ld. DR did not raise any specific objection to the factual submissions made by the Ld. AR.
We have heard the rival submissions and perused the material available on record. It is observed that, in the impugned assessment order, purchases from M/s Krishna Structural Steel (India) were recorded at Rs. 9,09,328/-, whereas the assessee has claimed the correct amount to be Rs.94,999/-. The relevant 4 ITA 276/Mum/2025 Maa Ashapura Developers purchase bill has been placed on record in the paper book. However, at this stage, we are not in a position to verify the genuineness of the said transaction. It is further noted that the Ld. CIT(A) passed the appellate order ex parte. The reasonable opportunity was duly denied for submission of evidence. In our considered view, the matter deserves to be remanded to the file of the Ld. CIT(A) with a direction to consider the assessee’s submissions afresh, and to specifically examine the assessee’s claim regarding the correct purchase amount from M/s Krishna Structural Steel (India). Needless to say, theassessee shall be afforded a reasonable opportunity of being heard during the remand proceedings. At the same time, the assessee is expected to act diligently and extend full cooperation to ensure expeditious disposal of the appeal.
In the result, the appeal filed by the assessee bearing