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Facts
During a survey, the Assessing Officer (AO) treated purchases worth Rs. 8,79,300 from three suppliers as bogus. The CIT(A) confirmed the AO's addition. The assessee's purchases from these suppliers were based on ledger accounts showing a running account and operational business.
Held
The Tribunal held that while the assessee had not provided sufficient evidence to rebut the AO's findings, the AO could have used other methods to examine the suppliers. Therefore, the case was restored to the AO for readjudication.
Key Issues
Whether the addition on account of bogus purchases made by the Assessing Officer and confirmed by the CIT(A) is sustainable, and if alternative methods could have been used by the AO to verify the suppliers.
Sections Cited
133(6), 131(1)
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
O R D E R This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 12.02.2025 for the Assessment Year 2011-2012.
Shri Rajesh Kumar Mishra, ld. AR appeared on behalf of the assessee and Shri Sanjib Kumar Paul, ld. Sr.DR appeared on behalf of the revenue.
It was submitted by the ld. AR that there was a survey in the premises of the assessee and in the assessment which was done in the case of the assessee. The Assessing Officer has treated the purchases from Durga Trading Corporation, Tarama Ferrous & Nonferrous Trading Co. Pvt. Ltd. and Kaustri Metal Trading (P) Ltd. total to an extent of Rs.8,79,300/- as bogus purchases. It was the submission that the ld. CIT(A) has also confirmed the addition as made by the Assessing Officer. It was the submission that in the worst case scenario only the profit elements of the said bogus purchases is liable to be assessed. It was the submission that the Assessing Officer had issued notice u/s.133(6) of the Act. The Assessing Officer could have issued notice u/s.131(1) of the Act but he did not do so. It was the prayer that the addition made by the ld. Assessing Officer and confirmed by the ld.CIT(A) is liable to be deleted.
Ld Sr.DR vehemently supported the orders of the Assessing Officer and ld. CIT(A).
I have considered the rival submissions. A perusal of the assessment order at page 2 shows that the Assessing Officer has issued notice u/s.133(6) of the Act to the three suppliers from whom the assessee has made the alleged bogus purchases. The notices were returned with the remarks “Not Known”. The assessee was asked by the Assessing Officer to provide the current addresses of those suppliers. That was also not provided by the assessee. A perusal of the order of the ld. CIT(A) shows that the assessee has practically not produced any evidence before the ld.CIT(A) to revert the findings of the ld. Assessing Officer. However, the assessee has taken a stand that the gross profit in regard to the bogus purchases could be added. In normal circumstances there should obviously mean that bogus purchases as identified by the Assessing Officer is not explained. However, considering the facts that the assessee has been claiming that there were other methods for the Assessing Officer to examine the suppliers from whom the purchases have been made, in the interest of justice, the issues in this appeal are restored to the file of the ld.AO for readjduication after granting the assessee adequate opportunity