RAJVEER LEAF SPRINGS PRIVATE LIMITED,PALDA. INDORE vs. DCIT/ACIT- 4(1), AAYAKAR BHAWAN, RESIDENCY AREA, INDORE

2.2 That the aforesaid assessment order bears No.ITBA/AST/S/147/2022-23/1051112092(1) and that same is dated 22.03.2023 which is hereinafter referred to as the “impugned assessment order”.

2.3 That the assessee being aggrieved by the aforesaid“impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons are as under:-

“5.3 In Grounds 2 to 4, the assessee argues that the addition of Rs. 4,62,63,870 under Section 69C of the Income Tax Act, 1961,

Page 3 of 10 as unexplained expenditure, is erroneous and unjustified. The assessee contends that the AO erred in passing the order by invoking Section 69C of the Income Tax Act, 1961, without considering the details and documentary evidence furnished during the proceedings.

5.3.1 It is observed from the assessment order that the addition under Section 69C was based on concrete evidence gathered during investigations. The two entities in question, M/s RA Enterprises and M/s Radha Rani Traders, were conclusively identified as non-genuine by the Investigation Wing and the GST Department. Statements from the proprietors of these entities confirmed that no actual goods were traded. Investigations revealed that neither entity had operational warehouses or transport facilities, and the transport documents submitted were fabricated. Both entities were found to be issuing fake invoices to provide input tax credit (ITC) benefits without actual supply of goods. These findings establish that the purchases recorded by the assessee with these entities were non-genuine. As the transactions lacked any credible documentary support, the AO was justified in treating them as bogus and adding the corresponding amounts under Section 69C.

5.3.2 Despite repeated notices and opportunities during the assessment proceedings, the assessee failed to provide critical evidence to validate the purchases. The AO specifically requested transportation details, e-way bills, weightment slips, and purchase invoices to establish the genuineness of the transactions. Instead of furnishing these documents, the assessee claimed that the original records were seized by the GST Department. However, no credible evidence, such as Panchanama or seizure memos, was submitted to substantiate this claim. The burden of proof to demonstrate the legitimacy of the transactions lies with theassessee under Section 69C, whichwas not discharged.

5.3.3. The financial transactions of M/s RA Interpuses and MisRadha Rani Traders further corroborate then non- genuineness. Both the entries displayed a consistent pattern of receiving funds via RIGS, followed by immediate cash withdrawals Such patterns of receiving cash and immediate withdrawals are characteristic and definitive feature of accommodation entries. The proprietors of these entities failed to provide any valid supporting ledgers or sales records corresponding to the assessee's transactions. These financial patterns clearly indicate that the purchases were bogus.

5.3.4 Courts have consistently upheld additions for bogus purchases in cases with similar facts. In N.K. Industries Ltd. v. DCIT (72 taxmann.com 289), the Gujarat High Court upheld the addition of the entire amount of bogus purchases, a decision later affirmed by the Supreme Court. In CIT v. La Medical Devices Ltd. (250 ITR 575), the Delhi High Court ruled that when purchases are shown to be non-genuine, the entire amount is to be disallowed, regardless of whether goods were procured from alternative sources. In Kaveri Rice Mills v. CIT (157 Taxman 376), the Allahabad High Court held that bogus purchases inflate expenditure and should be added back in full to the income.

5.3.5 These rulings validate the AO's approach to disallowing the full amount of purchases from the flagged entities.

5.3.6 Section 69C allows the AC to treat unexplained expenditure as income if the assessee fails to substantiate it with evidence. In this case, the purchases of Rs. 4.62.63,870 lacked any credible documentation to confirm their authenticity. The entities involved were conclusively proven to be issuing fake invoices without supplying goods. The assessee failed to provide independent evidence of the existence of goods, such as details of alternative suppliers, movement of goods, or inventory records. Therefore, the conditions for invoking Section 69C were satisfied

5.3.7 The assessee's defense that some documents were seized by the GST authorities is not supported by evidence. Moreover no alternative records, such as copies of bank statements, stock registers, or communications with suppliers, were provided to substantiate the transactions. The claim that the purchases were genuineis contradicted by the findings of the Investigation Wing and the statements of the flagged entities' proprietors. The AO's addition is a proportionate response to the evidence of bogus purchases. Adding the entire amount is consistent with judicial precedents and necessary to neutralize the inflated expenditure reflected in the assessee's books.

5.3.8 Thus the addition of Rs. 4,62,63,870 under Section 69C is fully justified. These grounds of appeal, therefore, lack merit and are dismissed”.

2.4 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal

Page 5 of 10 and has raised following grounds of appeal in the Form No.36 against the “impugned order” which are as under:-

“1. On facts and circumstances of the case and in law, the L.d. CIT(A) erred in upholding the order passed u/s 147 r.w.s. 144B of the Income Tax Act, 1961.

2. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming the addition made by the Assessing Officer of Rs. 4,62,63,870/- u/s 69C of the Act on account of alleged bogus purchase transactions.

3. On the facts and circumstances of the case and in law, the L.d. CIT(A) erred in upholding the action of Assessing Officer of invocation of section 115BBE in taxing the alleged addition made on account of bogus purchase transactions.

4. The appellant craves leave to add any new ground of appeal or alter, amend or delete any of the above grounds of appeal”.

The Ld. Ar submitted that there was non submission of relevant

Page 6 of 10 material and documents on the account of search and seizure operations which was carried out by the office of Director General, Central Excise Intelligence (Now GST Department) wherein the relevant and concerned documents were taken by them. The Ld. AR submitted that as and by way of letter dated 05.04.2023 they requested the Office of DGCI Zonal Unit, Bhopal to furnish them these documents and copy of letter dated 05.04.2023 was tendered to this tribunal across bar. The Ld. AR further submitted that the “impugned order” is dated 11.02.2025 and that necessary and relevant documents which they had sought from DGCI was provided to the assessee after the date of “impugned order”. It was urged that now the assessee has all the documents in support of their case and are willing to file the same before the income tax authorities so that correct income exigible to tax can be determined by them. It was submitted that all these documents are now filed in paper book tendered from pages 1 to 372. It includes purchase invoices too which could not be filed earlier before the Ld. A.O. It was finally prayed that the “impugned order” be set aside and matter be remanded back to the file of Ld. A.O. The Ld. DR appearing for Page 7 of 10 and on behalf of the revenue submitted that revenue has no objection if the “impugned order” is set aside and the matter is remanded back to the file of Ld. A.O on denovo basis.

4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR &the Ld. DR to determine the legality, validity of the “impugned order” basis law and by following the due process.

4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered view that both the Ld. AR & Ld. DR are Ad idem that the “impugned order”that the “impugned order”should be set aside and that the matter should be remanded back to the file of Ld. A.O so as to enable him to pass a fresh order after taking into consideration the entire gamut of the case from all the angles on denovobasis.

The assessee is directed to file all the documents and material so Page 8 of 10 placed before this tribunal before the Ld. A.O to enable him to pass a fresh order.

4.4 In view of the premises drawn up by us, we set aside the “impugned order”and remandthe case back to the file of Ld. A.O on denovo basis with a direction to adjudge and adjudicate afresh on denovo basis. The Ld. A.O is directed to pass a speaking and well reasoned order on merits.

5.2 In view of the aforesaid the appeal of the assesse is allowed for statistical purpose. Order pronounced in open court on 28.11.2025.