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Facts
The assessee declared total income of Rs. 5,74,885/-. The AO, based on information regarding alleged bogus purchases from operators amounting to Rs. 57,00,531/-, made an addition to the assessee's income. The CIT(A) upheld the AO's order.
Held
The Tribunal observed that crucial evidence like transportation details and delivery challans were not properly verified by the AO. Due to a gap in factual verification, the Tribunal found it necessary for the issue to be re-examined at the AO's level.
Key Issues
Whether the addition made on account of alleged bogus purchases, without proper verification of crucial supporting documents, is justified.
Sections Cited
143(1), 147, 148, 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEEShri Vimal Punmiya Shri Surendra Mohan (Sr. DR)
Date of hearing : 01/04/2026 Date of pronouncement : 07/04/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2011-12, date of order 03.10.2025. The impugned order emanated from the order of the Ld. Income Tax
The brief facts of the case are that the assessee filed the return by declaring total income Rs.5,74,885/-. The return was processed u/sec. 143(1) of the Act. The Ld. AO obtained the information from DGIT(Inv.) Mumbai that the assessee had purchased from bogus entries operators and accord the purchase bill from impugned assessment year from different entities total amount to Rs.57,00,531/-. Based on the information the Ld. AO issued the notice u/sec. 148 and completed the reassessment u/sec. 147 of the Act. The Ld. AO confirmed the addition amount to Rs.57,00,531/- for purchase made from concern to be non genuine. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) uphold the impugned assessment order. Being aggrieved assessee filed an appeal before us.
The Ld. AR argued and filed a paper book containing page 1 to 152 which has been placed on record. The Ld. AR contended that the assessee obtained the bills from the sellers and all the payments have been made through banking channel. The evidence related to purchase from parties are duly enclosed in the APB considering ledger account, bank statement related to the payments, purchase bills, delivery challans and corresponding sale bills which are enclosed in APB page 30 to 150. The Ld. AR contended that all the transactions are genuine only mere information from the sales tax department the Ld. AO cannot treat the transaction bogus and add back the entire amount of purchase with the total income of the assessee. Further he contended that the corresponding sale was also made related to purchase so, the alleged transactions with the parties are Akhlaque Ahmed Ziyaullah Khan treated to be genuine. The Ld. AR prayed to delete the addition made by the Ld. AO.
The Ld. DR argued and stood in favour of the orders of the revenue authorities. The Ld. DR contended that the Ld. AO considering all material facts and information obtained from the website, recorded statement & information from the sales tax department had confirmed the additions. The Ld. DR invited our attention in impugned assessment order page no. 6 para no.10 which is reproduced as below: “The assessee could not produce any details in respect of transportation of the said goods. Despite the specific query the assessee was not able to produce delivery challan, transport details, any payment made to Octori, In and out register, the inability of the assessee to produce these details leads to the facts that the material was never purchased from the alleged party. At the same time the fact that the assessee has shown the sales of said goods leads to the conclusion that assessee had purchased goods from the grey market with funds, sources of which is not explained. The whole transaction is ploy by the assessee brings his unaccounted money in the books in the form of accommodation of entry from the said alleged bogus party.”
We have carefully considered the rival submissions and perused the material available on record. It is observed that the entire addition made by the Ld. AO is primarily based on information received from the Sales Tax Department and the Investigation Wing, coupled with the alleged non-compliance by the assessee in furnishing certain supporting evidences during the course of assessment proceedings. At the same time, the assessee has contended that all purchases were duly recorded in the books of account, payments were made through banking channels, and corresponding sales have been duly offered to tax. However, from the assessment records, it emerges that certain crucial evidences, such as transportation details, delivery challans, octroi receipts, and other