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Facts
The Assessing Officer (AO) disallowed purchases amounting to Rs. 5,27,48,381/- on the grounds that their genuineness could not be established. The assessee had provided documents to the AO, but the AO alleged that not enough evidence was submitted. The CIT(A) dismissed the appeal for non-prosecution and also on merits.
Held
The Tribunal noted that the assessee had submitted documents to the AO and later provided ledger confirmations to the Tribunal. Due to the procedural dismissal by the CIT(A), the AO's verification of the genuineness of the suppliers and purchases was not conclusive. Therefore, the Tribunal set aside the lower authorities' orders.
Key Issues
Whether the purchases were genuine, and if the assessee had provided sufficient evidence to the AO and CIT(A) to establish their genuineness.
Sections Cited
133(6)
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of NFAC, Delhi dated 22/10/2024 in respect of the A.Y. 2021-22.
The assessee is an individual and owning a medical agency in the name of Maheshwari Medical Agencies. The assessment was taken up for scrutiny and the AO had alleged that the purchases effected from 4 parties are not made as per the law so as to establish the genuineness of these purchases. The AO also made a detailed enquiry u/s. 133(6) of the Act by issuing notices to the said parties for which the sellers had not filed any details and therefore the AO had concluded the assessment and disallowed the said purchases of Rs. 5,27,48,381/- which was debited in the P&L account of the assessee. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that all the details about the sellers and various documents in support of the genuineness of the sellers were all produced before the AO but the AO without considering the said submissions and the documents had made the assessment, which is not in accordance with law. The assessee had unfortunately not appeared before the Ld.CIT(A) and therefore the Ld.CIT(A) had dismissed the appeal for want of prosecution and thereafter proceeded to decide the appeal on merits and held that no evidences in support of the grounds were filed before him and therefore even on merits, the Ld.CIT(A) had dismissed the appeal filed by the assessee.
As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that various documents in support of the objections raised by the assessee were furnished before the AO but the AO had failed to consider the said objections as well as the documents and arbitrarily disallowed the purchases made by the assessee as not genuine.
At the time of hearing, the Ld.AR also filed a paper book and also enclosed the ledger confirmations received from the said sundry creditors i.e. the sellers and also relied on several orders of the various Tribunals and prayed to allow the appeal.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
It is the submission of the assessee that various documents in respect of the suppliers were furnished before the AO and sought time to produce the ledger extracts of the said suppliers but the AO without considering the said documents had treated the said purchases effected from the suppliers as bogus purchases and denied the same. The assessee also raised this plea before the Ld.CIT(A) but unfortunately the assessee had not appeared before the Ld.CIT(A) and also not filed any written submissions in support of the various grounds raised by them and therefore the Ld.CIT(A) had dismissed the appeal for non-prosecution. Further, the Ld.CIT(A) had proceeded to decide the appeal on merits and dismissed the grounds raised by the assessee for the reason that no written submissions were filed before him and also no supportive documents were furnished.
Before us, the assessee filed a paper book in which the ledger confirmations received from the said suppliers were furnished to show that the suppliers are in existence. The AO had alleged that no documentary evidence in support of the claims were filed before him. But as seen from the grounds raised by the assessee before the Ld.CIT(A) and also before this Tribunal, various documents were furnished before the AO and the ledger extracts alone could not be produced before him. But the AO without considering the said facts had made the assessment on the ground that no material documents were placed before him. Now the assessee had also furnished the ledger extract of the said suppliers to confirm that the said suppliers are genuine and the transactions effected by them are also genuine.
The veracity of the claim made by the assessee that the documents were furnished before the AO could not be ascertained by the Ld.CIT(A) since the appeal was dismissed for non-prosecution. Considering the document now furnished, which is only a ledger extract of the suppliers, we AO and based on the verification of the records, the necessary conclusion could be arrived. We, therefore set aside the order of the lower authorities and remit this issue to the file of the AO for denovo consideration. It is also open to the assessee to furnish the necessary documents in relation to the said suppliers. The AO is also directed to receive the documents from the assessee and also after granting a reasonable opportunity of being heard, decide the issue by one way or another.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th August, 2025.