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Facts
The assessee, engaged in trading ferrous and non-ferrous metals, declared a total income of Rs. 29,830/- for A.Y. 2011-12. The case was reopened based on information from the Sales Tax Department alleging the assessee benefited from bogus purchase bills from several parties, totaling Rs. 89,97,057/-. The Assessing Officer added Rs. 11,24,632/- (12.5% of alleged bogus purchases) to the total income.
Held
The Tribunal noted that the assessee's Authorized Representative contended the transactions were genuine and requested another opportunity to present the case. The Departmental Representative opposed this, stating the assessee had multiple opportunities. The Tribunal, deeming it fit to provide one last opportunity in the interest of natural justice, remanded the case to the CIT(A) for de novo adjudication.
Key Issues
Whether the CIT(A) erred in confirming the addition for bogus purchases without appreciating the documentary evidence provided by the assessee and whether the assessee is entitled to one last opportunity to present its case before the CIT(A).
Sections Cited
250, 148, 143(3), 147, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals)-2, Chennai (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2011-12.
The assessee has challenged this appeal on the following grounds:
1. (a) On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition on the pretext that necessary explanation and supporting documents were not submitted ignoring the fact that all the response were given.
2. On facts and circumstances of the case and in law, 1d. CIT (A) erred in confirming the opinion of the A.O on alleged bogus purchases without appreciating the facts that the opinion of the A.O is based on merely presumptions and sub conjectures and not on any material evidences corroborating the purchases when it is an accepted fact that material evidences super cedes all presumptions. (b) The CIT (A) erred in confirming the addition without appreciating the understated vital facts that the purchases are duly supported with necessary documentary evidences including (A.Y.2011-12) Pooja Metal Corporation vs. ITO quantitative tally of purchases and sales and there appears no sign of it being bogus and the learned officer accepted the books of accounts. (c) The Appellant prays that the addition/ disallowance of entire Rs. 1124632/- made in respect of alleged purchases be deleted."
3. On the facts and circumstances of the case and in law, the CIT (A). Erred in dismissing the ground for the appellant's plea of withdrawal of initiation of penalty proceedings u/s 271(1) (c).
The brief facts are that the assessee is a registered firm, engaged in the business of trading in ferrous and non ferrous metals in the name and style M/s. Pooja Metal Corporation and had filed its return of income on 29.09.2011 for the year under consideration, declaring total income at Rs.29,830/-. The assessee’s case was reopened vide notice u/s. 148 of the Act dated 16.09.2014 for the reason that as per the information received from Sales Tax Department the assessee was one of the beneficiary of availing accommodation entries by way of bogus purchase bills from the following parties:
Sr. Name of the party Amount No. 1 Surat Tube Corporation 5,04,504/- 2 Vidhi Metal Industries 3,71,475/- 3 Valianat Steel Engineering Co. 36,65,510/- 4 Pushpak Metak Industries 1,47,264/- 5 Padmavati Metal Industries 16,13,768/- 6 Real Steel (India) 26,94,536/- Total 89,97,057/- The ld. Assessing Officer ('A.O.' for short) then passed the assessment order u/s. 143(3) r.w.s. 147 of the Act on 18.03.2016, determining the total income at Rs.11,54,462/- after making an addition of Rs.11,24,632/- being 12.5% of the alleged bogus purchase, aggregating to Rs.89,97,057/-.
The assessee had challenged the assessment order before the ld. CIT(A).
The ld. CIT(A) vide an ex parte order dated 22.03.2024 had confirmed the additions made by the A.O. on the ground that the assessee has failed to furnish the the assessee.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
The ld. Authorized Representative (AR for short) for the assessee contended that the assessee’s transactions were genuine and prayed for one more opportunity to present the assessee’s case before the ld. CIT(A).
The ld. Departmental Representative (ld. DR for short) opposed to setting aside the issue to the ld. CIT(A) for the reason that the assessee was given several opportunities to present its case before the first appellate authority.
Having heard the rival submissions and perused the materials available on record.
We deem it fit and proper to provide the assessee with one last opportunity to furnish the documentary evidence in support of its claim before the ld.CIT(A) in accordance with the principles of natural justice. The assessee is directed to co-operate in the proceedings before the ld. CIT(A) by furnishing all the relevant documentary evidence without causing any undue delay. The ld. CIT(A) is directed to peruse the same and to decide the case on merits. We hereby remand this appeal to the file of the ld. CIT(A) for de novo adjudication.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 25.10.2024.