M/S. KING MOBILES,VELLORE vs. ITO WARD 1 VELLORE, VELLORE

The assessee is a firm engaged in the business of selling mobile phones. The assessee filed a return of income for A.Y 2018-19 on 25.01.2019 declaring total income of Rs. 16,37,520/-. The A.O reopened the assessment of the assessee for the reason that the assessee is involved in the transaction of bogus purchases with an intention to increase the expenditure and reduce the taxable income of the assessee. The A.O during the course of reassessment proceedings issued notices u/s. 133(6) of the Act to 29 suppliers from whom the assessee has made purchases. Since the A.O received confirmation from only 14 out of the 29 parties, the A.O considered the balance purchases to the tune of Rs. 20,87,85,137/- as addition u/s. 69C of the Act. Aggrieved, the assessee filed further appeal before the CIT(A).

The CIT(A) dismissed the appeal ex-parte for the reason that the assessee did not respond to the notices nor did the assessee filed any submissions. The assessee is in appeal before the Tribunal against the order of the CIT(A).

We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that all the purchases made by the assessee are genuine and that the A.O treated the purchases as bogus merely for the reason that certain parties did not respond the notices u/s. 133(6) of the Act. The Ld. AR further submitted that though the CIT(A) has stated that the assessee has made submissions (refer para 4 of page 5 of CIT(A) order) but has dismissed the appeal ex-parte without considering the submissions. The Ld. AR accordingly prayed that one more opportunity may be given. Considering the facts and circumstances unique to the assessee's case, we are of the considered view that the assessee M/s. King Mobiles :- 3 -: may be given one more opportunity to represent the case properly before the lower authorities. Accordingly we remit the appeal back to the AO with a direction to call for the necessary documents with regard to the impugned additions and decide the issue in accordance with law. The assessee is directed to file the required evidences as may be called for and cooperate with the assessment proceedings. It is ordered accordingly.

Since we have remitted the appeal back to the AO for considering the impugned additions afresh, the stay petition filed by the assessee has become infructuous and dismissed accordingly.

In the result, the appeal of the assessee is allowed for statistical purposes and the stay is dismissed as infructuous.