ITO., WARD-9(1), HYDERABAD vs. MANISHA DIXIT, VANASTHALIPURAM

(िनधा�रण वष�/Assessment Year: 2021-22) Income Tax Officer Vs. Smt. Manisha Dixit Ward 9 (1) Vanasthalipuram Hyderabad Hyderabad PAN:BHCPD9831L (Appellant) (Respondent) राज� व �ारा/Revenue by : Dr. Narendra Kumar Naik, CIT (DR) िनधा�रती �ारा/Assessee by: Shri Rama Murthy T, CA सुनवाई की तारीख/Date of hearing: 02/12/2025 घोषणा की तारीख/Pronouncement: 05/12/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by the Revenue, feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 24.02.2025 for the A.Y.2021-22. 2. The Revenue has raised the following grounds of appeal:

Page 1 of 7 “1. The learned CIT(A) erred to appreciate that an isolated test check verification will not make good the genuineness of other purchases made unless proved.

3. The learned CIT(A) failed to appreciate that the AO has brought on record that the assessee has made purchases with parties who are having "inactive" GST registration.

4. Aggrieved with the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee filed additional evidences under Rule 46A of the Income Tax Rules, 1962 (“the Rules”), which were admitted by the Ld. CIT (A). The Ld. CIT(A) thereafter called for a remand report from the Ld. AO. However, the Ld. AO did not submit any remand report. The Ld. CIT(A), on his own verification, examined the documents relating to only one party, Peermohd Farheen Anjum, found them in order, and on that basis presumed that the documents pertaining to the remaining twelve parties were also in order. He thus deleted the entire addition of Rs.7,00,52,477/-.

5. Aggrieved with the order of the Ld. CIT (A), the Revenue is in appeal before us. At the outset, the Learned Departmental Representative (“Ld. DR”) submitted that the sole dispute arising out of the grounds raised by the Revenue pertains to the deletion of the addition made under Section 69C of the Act of Rs.7,00,52,477/- on account of purchases from 13 parties. The Ld. DR submitted that although it is a fact that the Ld. AO did not furnish any remand report before the Ld. CIT(A), it is equally a fact that the assessee failed to furnish several basic documents before the Ld. AO during the assessment proceedings. Inviting our attention to page no. 9 of the assessment order, the Ld. DR submitted that the Ld. AO had specifically called for the ledger accounts as appearing in the books of the assessee for the financial year 2020-21, copy of bills issued for the purchases, transportation memos and details of the mode of payment. The Ld. DR further submitted that the Ld. AO had also called upon the assessee to clarify whether the payments were made through bank

Page 3 of 7 or by cash and, in the event of bank payments, to furnish bank statements indicating the dates of such payments. These documents were necessary for the Ld. AO to satisfy himself whether the payments had been duly recorded in the books of account. However, the assessee failed to furnish the said documents, thereby preventing the Ld. AO from verifying the source of payments for the purchases. The Ld. DR argued that purchase bills and details of payment are the most fundamental pieces of evidence to prove genuineness of purchases, and in the absence of such material, the Ld. AO was compelled to make the addition. The Ld. DR also submitted that although the assessee furnished documents before the Ld. CIT(A) and the same were admitted under Rule 46A of the Rules, the Ld. CIT(A) was duty- bound to verify all the documents relating to all thirteen parties. Instead, the Ld. CIT(A) verified only one party’s documents and presumed that the rest were in order. Such an assumption, without verification, according to the Ld. DR, is legally untenable. Accordingly, the Ld. DR prayed for the matter to be remanded to the file of the Ld. AO for proper verification.

Page 5 of 7 had also called for the details regarding the mode of payment, whether through bank or by cash, and in case of bank payments, copies of the bank account statements indicating the dates of payment. These details were essential for the Ld. AO to verify whether the payments were duly recorded in the books of account. However, in the absence of such documents, the Ld. AO was unable to verify the source of payments for the purchases. The above aspect clearly establishes that the Ld. AO did not have the benefit of examining crucial evidence directly linked with the genuineness of purchases. We also find that although the Ld. CIT(A) admitted additional evidence under Rule 46A of the Rules, he examined only the documents relating to one party and presumed that the documents for the remaining parties were also in order. Such a presumption cannot substitute for actual verification. Further, the Ld. AO had not furnished any remand report despite being called upon. In these circumstances, verification of evidences is incomplete. We also note that the decision relied on by the assessee is distinguishable on facts and does not apply to the present case. Therefore, in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld. AO for de novo verification of all evidences pertaining to all thirteen parties, including purchase bills, transportation memos, ledger accounts, payment proofs and bank statements. The Ld. AO shall examine the documents furnished by the assessee and thereafter pass a speaking order in accordance with law after providing adequate opportunity of being heard. In view of the above, the order of the Ld. CIT(A) is set aside and the matter is restored to the file of the Ld. AO for fresh adjudication.