M/S PSP TRADING PVT LTD,PATNA vs. ITO, WARD- 2 (1), PATNA

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 12.02.2025 for the AY 2018-19.

2. The assessee pressed only ground no.3, which is against the order of learned CIT (A) confirming the action of the learned AO in disallowing the purchases to the extent of ₹48,13,275/- u/s 37 of the Income-tax Act, 1961 (the Act), which is wrong, illegal and unjustified.

2.1. The facts in brief are that the assessee engaged in the business of wholesale trading of iron and steel mostly on consignment basis. The return o9f income was filed u/s 139 of the Act declaring income of ₹48,13,270. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 25.03.2022, on the ground that the assessee has made bogus and fictitious purchases worth of 2.2. In the appellate proceedings, the learned CIT (A) also confirmed the order of the learned AO on the ground that the notice issued u/s 133(6) of the Act was not responded by the supplier and even the verification unit could not locate the suppler company on the said address and finally, the appeal of the assessee was dismissed.

2.3. We find that in this case the addition was made by the learned AO in respect of purchases from Divine Alloys & Power Co. Ltd., which was also back-to-back supplied to the customer. A copy of the invoices issued by M/s Divine Alloys and Power Co. Ltd. is attached at page no. 7-12 of the Paper Book-I. We note that the assessee has paid the purchase consideration through banking channel and copies of the invoices along with the transportation receipts are available in the paper book. We also find that while disallowing the purchases, the corresponding sales made by the assessee were not disbelieved by the “1. On the last date of hearing on 10-09-2025, copy of the order sheet placed at page 54 of the Paper Book-II, ('the PB-II'), Hon'ble Bench had asked the assessee to provide some documents/clarifications, brief explanation of the assessee in respect of each of the items is as under; Sl No. Nature of the documents/ explanation Explanation in brief of the assessee requisitioned by the Hon'ble Bench 1. Details of the vehicles which have transported Copy of the invoices vide which the goods in the goods. question were purchased by the assessee from M/s Divine Alloys & Power Co. Ltd is placed at page 7 to 12 of the Paper Book-1, filed on 30- 06-2025. Kind perusal of which would envisage that the goods have been transported by three trucks. The information about the trucks have been downloaded from the "NextGen mParivahan" app, copy of the screen shot of the app is placed at page 55 of the PB-11 and the infromation about the trucks is placed at page 56to58 of PB-II. Kind perusal of the same would envisage that all the trucks had valid registration and the class of vehicle is Heavy Goods Carrier Vehicle, details of which are as under” Sl Truck Number Page Number of Paper Book_II No. where the information placed. a. JH05BS8818 Page 56 of Paper Book-II b. MH48T1682 Page 57 of Paper Book-II & MH48AG4648 Page 58 of Paper Book-II c.