DCIT, CENTRAL CIRCLE-4(3), KOLKATA, KOLKATA vs. BALAJEE MINI STEELS & REROLLING PRIVATE LIMITED , PATNA

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ITA 1688/KOL/2025Status: DisposedITAT Kolkata15 December 2025AY 2015-16Bench: SHRI RAJESH KUMAR, AM\nAND\nSHRIPRADIP KUMAR CHOUBEY, JM\nITA Nos.1688 to 1691/KOL/2025\n(Assessment Years: 2015-16 to 2018-19)\nITA No. 1725/KOL/2025\n(Assessment Year: 2016-17)\nDCIT, Central circle 4(3)\nBalajee Mini Steels & Rerolling\nAaykar Bhawan Poorva, 110,\nPrivate Limited\nShantipally, Kolkata-700107,\n603, Shantikunj Apartment,\nKolkata\nPhulwanipatna, G.P.O.800001,\n(Appellant)\nVs.\nPatna\nPAN No. AABCB7265J\n(Respondent)\nAssessee by\n: Shri Manish Rastogi, AR\nRevenue by\n: 15 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the deletion of additions by the Ld. CIT(A) was justified and upheld the CIT(A)'s order, thereby dismissing the Revenue's appeals. For AY 2015-16, the Tribunal noted that the assessee belonged to the Kanodia Group and that an identical issue had been decided in favour of the assessee in previous appeals. The Tribunal found that the entry operators admitted during search operations that the transactions were circular and intended to inflate the gross turnover. Crucially, the Tribunal observed that the assessee had not generated any profit from these circular transactions over and above what was already shown in the books of account. Therefore, the Tribunal agreed with the Ld. CIT(A)'s reasoning that since there was no profit realized from these transactions, no further addition was required. For AY 2016-17, the Tribunal found that the Ld. AO had made the addition under a wrong appreciation of facts. The CIT(A) had correctly recognized that there were no transactions with M/s Reyansh ReRoller Pvt Ltd. for that AY and that transactions with M/s Tanishi Commotrade Private Limited were not related to AY 2016-17. The Tribunal found no infirmity in the CIT(A)'s order and upheld it. The operative direction was to dismiss the appeals of the Revenue.

What were the facts?

The Revenue has filed appeals against the orders of the Commissioner of Income-tax (Appeals) for Assessment Years (AYs) 2015-16 to 2018-19. The appeals stem from the deletion of additions made by the Assessing Officer (AO) concerning alleged bogus purchases. For AY 2015-16, the AO added ₹1,07,03,817/- on account of suppression of income due to bogus purchases, applying a 4% profit rate. The assessee, Balajee Mini Steels & Rerolling Private Limited, was covered in a search operation on the Kanodia Group. The AO had framed the assessment under Section 147/143(3) of the Income Tax Act, 1961. The CIT(A) deleted the addition, holding that since both purchases and sales were managed by the same brokers and fully disclosed to inflate turnover, no further addition was warranted. For AY 2016-17, the AO made an addition of ₹10,10,35,518/- for alleged unaccounted transactions through M/s Reyansh Reroller Pvt Ltd. The CIT(A) deleted this addition, finding no transaction with that party for that AY and noting that transactions with M/s Tanishi Commotrade Private Limited were related to a different AY.

What were the issues?

1. Whether the deletion of addition of ₹1,07,03,817/- by the Ld. CIT(A) on account of suppression of income in respect of bogus purchases, as made by the Ld. AO, is justified? (Question of law and fact, relating to determination of income under the Income Tax Act, 1961). Assessee's contention: The assessee argued that the bogus purchases and sales were managed by the same brokers/commission agents and were intended solely to inflate the turnover. Since both were fully disclosed in the books of account, no further addition was required. The assessee also contended that the AO's reliance on case laws was distinguishable as the facts were different, particularly in cases where percentage disallowance was made on purchases from the 'grey market' to derive more income, which was not the case here. The assessee claimed that excluding purchases would necessitate excluding corresponding sales, reducing the returned income and leading to double taxation as income from fictitious circular trading was already offered. Revenue's contention: The Revenue's appeals are based on the AO's additions made on account of alleged bogus purchases, which were deleted by the CIT(A). The specific arguments of the Revenue are not explicitly detailed in the provided text, but their appeals challenge the CIT(A)'s deletion of the AO's additions.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 132,Section 147,Section 143(3),Section 144B

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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Manish Rastogi, AR
For Respondent: Shri Praveen Kishore &
Hearing: 01.12.2025Pronounced: 15.12.2025

3.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee is belonging to Kanodia Group of cases and we have already decided the identical issue in & Ors for A.Y. 2015-16 & Ors, wherein we uphold the order of ld. CIT (A). The operative part is as under:-

It would kindly be appreciated that the facts of the case in hand is totally different as no incriminating document was found during the case of search and seizure operation conducted by the department. The disallowance has been made on the basis of the information available in the insight portal and also The facts in this appeal are also identical as in involved as discussed above in A.Y. 2015-16. The only difference is that in stead of apply profit rate 4%, the ld. AO made the entire addition of bogus purchases to the income of the assessee on the ground that unaccounted transactions through intermediary M/S Reyansh Reroller Pvt Ltd. despite the assessee stating before the AO that the assessee has no transactions with the said party. Ld. Commissioner of Income- tax (Appeals) delete the addition by recording a finding of facts that there was no transaction with the said party and in fact noted in the appellate order that the assessee had done transactions with the sai d party in A.Y. 2015-16. We note that the ld. AO has made addition under wrong appreciation of facts which correctly recognized by the appellate authority in the appellate proceedings. The operative part is as under:-

“6.2. Discussion and decision:- 6.2.1. I have perused the assessment order u/s 147 r.w.s 144B of the Act dated 26.03.2022, post search assessment order u/s 147/143(3) of the Act dated 31.03.2024 and submission of the assessee.

On going through the above tabulated finding, it is quite evident that the assessee has not made any fake purchases or received any amount from the alleged entity M/s Reyansh ReRoller Private Limited during the period of AY 2016-17. Indeed, the A.Ys 2016-17 to 2018-19 1690 & 1691 /KOL/2025 4. The issue raised in these appeals are similar to one as decided by us in A.Y. 2015-16. Accordingly, our decision would, mutatis mutandis, apply to these appeals of assessee in & 1691/KOL/2025. Hence, the appeals of Revenue are dismissed.

5.

In the result, the appeals of the Revenue are dismissed.

Order pronounced in the open court on 15.12.2025.

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