ASHOK KUMAR JAIN ,MUMBAI vs. INCOME TAX OFFICER , MUMBAI

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ITA 932/MUM/2025Status: DisposedITAT Mumbai27 March 2025AY 2009-10Bench: SMT. BEENA PILLAI (Judicial Member), SHRI OMKARESHWAR CHIDARA ( (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the additional evidence produced by the assessee needed verification in light of a recent Bombay High Court decision. Consequently, the Tribunal remitted the issue back to the AO for fresh verification, granting the assessee an opportunity to present further evidence.

What were the facts?

The assessee's assessment was reopened based on sales tax department findings regarding bogus purchases, leading to an addition of Rs. 35,89,934. The CIT(A) upheld this addition. The assessee appealed to the Tribunal, submitting additional evidence to prove the genuineness of the purchases.

What were the issues?

Whether the purchases were genuine and whether additional evidence submitted by the assessee requires verification by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 37

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Income Tax Appellate Tribunal, “H(SMC

Before: SMT. BEENA PILLAI & SHRI OMKARESHWAR CHIDARA

For Appellant: Ms. Aakriti Seth
For Respondent: Shri. Pravin Salukhe, SR. D.R
Hearing: 19.03.2025Pronounced: 27.03.2025

Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 26/09/2019 passed by Ld. CIT(A) - 30, Mumbai for assessment year 2009-10 on following grounds of appeal :

1. The First Appellate Authority has erred on facts and in law by affirming the addition of Rs. 35,89,934/- (Rupees Thirty Five Lakhs Eighty Nine Thousand Nine Hundred and Thirty Four Only) to the returned income of the assessee under section 37 of the Income Tax Act, 1961 by deeming the purchases as bogus purchases. On the facts and in the circumstances of the case and 2 ITA 932/Mum/2025; A.Y. 2009-10 Ashokkumar Jain in law the penalty levied is unsustainable and is liable to be deleted as such. Hence it is prayed to Your Honor to give due directions to delete the penalty on the grounds of natural justice.

2. That the appellant craves leave for reserving the rights to amend, modify, alter, add, or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

2. At the outset the Ld.AR submitted that, the assessment was reopened based on the findings of the sales tax department which was shared with the DGIT INV Mumbai. Based on the information, the Ld.AO reopened the assessment of the assessee by forming a reasonable belief of income having escaped the assessment on account of bogus purchases. The Ld.AO called for various details and after considering the submissions of the assessee made addition of Rs. 35,89,934/- being 100% of the non genuine purchases. Aggrieved by the order of the Ld.AO assessee preferred appeal before the Ld.CIT(A).

3.

The Ld.CIT(A) however upheld the addition made by the Ld.AO. The assessee had relied on the decision of Hon’ble Bombay High Court in case of M/s. Mohommad Haji Adam and Co. reported in (2019) 103 taxmann.com 459. Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal.

4.

The Ld.AR filed before this Tribunal certain additional evidence in order to establish purchases to be bonafide. The assessee also filed bank statements, highlighting the payment were made through banking channel in respect of the sales invoice, the delivery challan, the VAT order report etc. He submitted that all these details are necessary to establish the genuiness of the purchases made by the assessee.

3 ITA 932/Mum/2025; A.Y. 2009-10 Ashokkumar Jain 4.1 On the contrary the Ld.DR placed reliance on recent decision of by Hon’ble Bombay High Court in case of Pr.CIT-5 vs Kanak Impex (Ind) Ltd through of 2021 pronounced on 03 March 2025, on identical issue in support of the addition to be upheld. We have perused the submissions advance by both sides in the lights of records placed before us.

5.

It is noted that, the additional evidences produced by the Ld.AR are necessary to be verified in the light of the ratio by Hon’ble Bombay High Court in case of Pr.CIT-5 vs Kanak Impex (Ind) Ltd (Supra). By the consent of Ld.AR we deem it proper to remit this issue back to the Ld.AO to carry out necessary verification in the light of the decision of by Hon’ble Bombay High Court. Needless to say that proper opportunity of being heard must be granted to the assessee and the assessee is at liberty to furnish all the necessary evidence to substantiate its claim which shall be subjected to verification by the Ld.AO.

6.

Accordingly the grounds raised by the assessee stands partly allowed for statistical purpose. In the result the appeal filed by the assessee stands allowed for statistical purpose. Order pronounced in the open court on 27/03/2025

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