BALJEET KAUR,DELHI vs. NATIONAL FACELESS ASSESSMENT TEAM, DELHI

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ITA 4674/DEL/2024Status: DisposedITAT Delhi06 January 2025AY 2018-2019Bench: SHRI SATBEER SINGH GODARA (Judicial Member)3 pages
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What did the Tribunal hold?

The Tribunal held that since the assessee's corresponding sales were treated as genuine, only the gross profit element of the purchases should be disallowed. A lump sum disallowance of 10% of the purchases (Rs. 2,38,100/-) was deemed just and proper.

What were the facts?

The assessee's purchases of Rs. 23,81,000/- for apparels and garments were treated as bogus by the authorities. The Revenue's case was based on the statement of one Sh. Aditya Jain, unearthed during a search.

What were the issues?

Whether purchases can be treated as bogus when corresponding sales are accepted as genuine, and if so, what is the extent of disallowance.

Which sections of the Income-tax Act were involved?

Section 147,Section 144

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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 06.01.2025Pronounced: 06.01.2025

Date of hearing 06.01.2025 Date of pronouncement 06.01.2025 ORDER This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1067439317(1), dated 08.08.2024 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Heard both the parties at length. Case file perused.

3.

It emerges during the course of hearing that both the learned authorities have treated the assessee’s purchases of Rs.23,81,000/- of apparels and garments in her regular business activity from M/s. Royal Enterprises; as bogus going by the search and the statement of one Sh. Aditya Jain, in the course of assessment framed on 08.02.2024 and upheld in the lower appellate proceedings.

4.

I have given my thoughtful consideration to the assessee’s pleadings and Revenue’s vehement contentions reiterating their respective stands. The Revenue’s case is that the assessee had made bogus purchases which has been rightly disallowed going by the statement of Sh. Aditya Jain forming part of the evidence unearthed during search. It is in this factual backdrop that the department herein could not dispute that the assessee’s corresponding sales already stand treated as genuine, and therefore, I quote PCIT Vs. Mohammad Hazi Adam & Co. (2019) 103 taxmann.com 459 (Bom) to hold that the only gross profit element involved in these purchases deserve to be disallowed. It is indeed coupled with the fact that the assessee has filed all her other evidences explaining her purchases/sales involved herein. I

2 | P a g e therefore hold in these peculiar facts and circumstances that a lump sum disallowance of estimated GP component herein of Rs.2,38,100/- i.e. at the rate of 10%, is considered just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.

6.

No other ground or argument has been pressed.

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