ASSISTANT COMMISSIONER OF INCOME TAX, CC-30, NEW DELHI, NEW DELHI vs. V. K. READY MIX CONCRETE PRIVATE LIMITED, NEW DELHI

PER BENCH This bunch of seven appeals as per following details have been preferred by the assessee and by the Revenue respectively against the separate

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orders of ld. Commissioner of Income Tax (Appeals)-30, New Delhi
(hereinafter referred to as ‘ld. CIT(A)’). The word ‘Act’ herein this order would mean Income Tax Act, 1961. S.
No.
Appeal Nos.
AYs
Appellant
CIT(A) Order
Details
Respondent
1
2020-
21
V K Ready
Mix Concrete
Pvt. Ltd.
PAN
AAECV6568K
Appeal
No.30/10778/2019-
20
dated
30.01.2025
Deputy
Commissioner of Income Tax,
Central Circle-30,
2
2018-
19

V K Ready
Mix Concrete
Pvt. Ltd.
PAN
AAECV6568K
Appeal
No.30/10372/2017-
18
dated
30.01.2025

Deputy
Commissioner of Income Tax,
Central Circle-30,
3
2019-
20

V K Ready
Mix Concrete
Pvt. Ltd.
PAN
AAECV6568K

Appeal
No.30/10609/2018-
19
dated
30.01.2025

Deputy
Commissioner of Income Tax,
Central Circle-30,

4
2021-
22

V K Ready
Mix Concrete
Pvt. Ltd.
PAN
AAECV6568K

Appeal
No.30/10119/2020-
21
dated
24.12.2024

Deputy
Commissioner of Income Tax,
Central Circle-30,

5
2018-
19
Assistant
Commissioner of Income Tax,
Central Circle-
30,
Appeal
No.30/10372/2017-
18
dated
30.01.2025
V K Ready Mix
Concrete Pvt. Ltd.
PAN
AAECV6568K
6. 2019-
20
Assistant
Commissioner of Income Tax,
Central Circle-
30,
Appeal
No.30/10609/2018-
19
dated
30.01.2025
V K Ready Mix
Concrete Pvt. Ltd.
PAN
AAECV6568K

ITA No.1440 to 1443/Del/2025

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V K Ready Mix
Concrete Pvt. Ltd.
PAN
AAECV6568K

ITA No.1400 to 1443/Del/2025 (Assessee’s appeal)
2. The assessee has contested the order of the ld. CIT(A) for Assessment
Years 2018-19, 2019-20-, 2020-21 and 2021-22 through the above four appeals. The Registry had noted that the grounds of appeal uploaded by the assessee were not signed by the assessee. Accordingly, the mistake was communicated for rectification through communication dated 11.03.2025 of the Registry. On 27.08.2025, the ld. AR of the assessee namely Shri Jatin
Gupta was present who filed signed grounds of appeal. Hon’ble Bench noted that the grounds of appeal signed by the assessee were actually photocopies of signed copies. Accordingly, the Hon’ble Bench directed the appellant assessee to file copies of grounds of appeal signed in original. At the request of the ld. AR the case was adjourned for 27.10.2025. On the said date none appeared on behalf of the appellant assessee. The Bench observed and issued directions for defect removal and posted the matter for 17/12/2025. Once again there has been no response from assessee.
3. Section 253(6) of the Act clearly postulate that an appeal before the tribunal shall be filed in the prescribed form and verified in the prescribed manner. Grounds of appeal filed by an appellant constitute integral document

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in an appeal memorandum. It is necessary for the litigant to place his signatures on the grounds of appeal to pursue his matter before the Tribunal for adjudication. In the present case, the appellant has been given as many as three opportunities, including two by an Hon’ble Co-ordinate Bench of this Tribunal to rectify the defect of unsigned grounds of appeal. The appellant has chosen not to comply with the request of the Registry and directions of the Bench. As the appeal of the assessee is defective, the same cannot be adjudicated. Accordingly, appeals of the assessee in ITA Nos.1440 to 1443/Del/2025 for Assessment Years 2018-19, 2019-20-, 2020-21 and 2021-
22 are dismissed.
ITA Nos.2952 to 2954/Del/2025 (Revenue’s Appeal)
4. We would like to take up the appeals of the Revenue. The ld. DR submitted that the facts of all the appeals are identical and hence all the above appeals were heard together and are being adjudicated by this common order.
Further, for the purposes of this order, we have taken facts and figures for AY
2020-21. As facts for all the remaining years are identical, decision taken for AY 2020-21 would apply mutatis mutandis to AY 2018-19 and 2019-20. The Revenue has raised following grounds of appeal for Assessment Year 2020-
21:-
1. Whether on the facts and in the circumstances of the case and in the provisions of the law, the Ld. CIT(A) is correct in allowing the appeal of the assessee without appreciating the facts of the case.

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“…..4. The AR of the assessee has made the compliance of the above notices. Submission made by the AR of the assessee considered and not found tenable with regard to the purchase of Rs. 4,02,65,776/- from the entities controlled by Sh. Sanjay jain for the following's reasons: -
On analysis of the tally data, found with Sanjay Jain that under the head of sundry debtors, there are ledgers of various intermediaries which includes the list of intermediaries between the beneficiaries and Sanjay Jain. For each intermediary, Sanjay Jain maintains a ledger in which details of the transaction are entered into tally. Entry of RTGS received from the beneficiary and Cash sent to the beneficiary through the intermediary are entered into the ledger.
Sanjay Jain had given list of top 50 beneficiaries as well as extracted from tally data as annexure A-31, who have benefitted from his entry operation business, the name of your company/firm is found in the list of the beneficiary.
5. The assessee vide his reply explained the working of their firm and claimed that the material purchased by them is only for the works related with the Government allotted work orders and the material is directly received at the premise of the site. The reply of the assessee is not complete in respect of enclosing any documentary evidences, any invoice copies mentioning e-way bills, challans, bilty, etc. to prove that material is supplied physically through these companies, controlled by the Sanjay Jain is received by them.
Even if the reply of the assessee is accepted they have worked for Govt. Departments, it is proven facts that purchases have been inflated through bogus billing issued by firm / company of the Sanjay Jain.
However, one another issue also there that no stock found from the business premises of Sanjay Jain and intermediaries at the time of search.
There was no evidence/seized material of Kachchi Parchi from where assessee actually purchase the goods, which could prove that the bogus billing have been covered with material purchase in cash from open market.
Hence, it is proved that this is nothing but inflated purchase in the form of bogus purchases to claim expenses in books of accounts.
5.1 There are reasons why Expenses are bogus:
(i) To verify the genuineness of these transactions undertaken by the assessee, Notice u/s 133(6) were issued but the entity did not ITA No.1440 to 1443/Del/2025

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responded to the notice and no reply has been received from them.
(ii) Furthermore, ITR of these firms/companies were verified from ITBA and it was observed that most of the Firms/Companies have no creditworthiness from where purchases have been made by the assessee.
(iii) Many firms/Companies have also not filed GST return except
GSTR-I (Analysis made by the Investigation wing). iv.
(iv) Several opportunities have been given to the assessee. However, no corroborative evidence has been submitted to explain the genuineness of Purchases/ Expenses.
(v) The assessee has not submitted any evidence for the actual movement ofthe material like e-way bills/bilty as mode of transport details. vi.
(vi) To ascertain further, many of the transport vehicle numbers were verified on the e-VAAHAN portal of Govt. Of India and it was found that no data is available on portal.
(vii) The statements recorded u/s 132(4) of the entry operators and intermediaries and employees of the assessee company, substantiate the facts that bogus purchases/expenses has been regularly made by the company to show low profits.
(viii) Further, The beneficiaries like M/s. Girdharilal Construction
Pvt. Ltd., has accepted the purchases as bogus which were doing same business and has made purchases mostly from the same dealers.
(ix) GST has been deposited by the assessee after search which substantiate that the assessee has made bogus purchases.
6. The assessee has no explanation in respect of the evidence seized during the search operation and the details submitted by them is irrelevant and only to derail the assessment proceedings, when there are ample evidences are available on records in respect of the modus operandi of these transactions done by these entities, bogus billing for accommodation entries, commission and cash transaction against
Bank/RTGS transfer of money, non-availability of records with the assessee, therefore, the transactions under question remain un- explained in the hands of the assessee for the amount shown as hereunder.
The facts and circumstances of the case as well as the written submissions made by the assessee in the course of the proceeding under section 153A of the Act have been carefully examined. In this regard, on such examination of the records available and merits of the case, and reply of the assessee has been considered and not found tenable as the assessee has not substantiate the entries found as no supporting

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document in this respect is produced to substantiate these transactions, the amount of Rs. 4,02,65,776/- remained unexplained in regard to genuineness of these purchases done. However, the assessee has booked the GST Input of Rs. 88,08,138/- pertaining to transaction held in A.Y 2020-21. Detailed analysis of transactions are done in following paragraphs.
7. It is established that the assessee company has made bogus purchases of Rs. 4,02,65,776/- from the entities controlled by Sanjay
Jain which is clear from the statement of Sh. Sanjay Jain and seized tally data as discussed in above paras. Assessee has taken the bogus purchases from the various entity controlled by Sanjay Jain entry provider. Further, on perusal of the relevant details of purchase made with the above entity by the assessee, it is found that The assessee has made payment of Rs. 4,02,65,776/- against bogus purchase in its books
It is observed that the assessee has taken benefit of Rs. 3,14,57,638/- under head purchase (profit and loss account) in its books of accounts and Benefit of Rs. 88,08, 138/- (as assets in balance sheet) is taken under as GST Input. As under Income Tax Act, the assessee has reduced its profit through booking bogus purchase in its Profit and Loss account by Rs. 3,14,57,638/- during the relevant year and paid less
GST tax to government department by Rs. 88,08,138/-. As far as GST amount is concerned, department has already passed the information to concerned authority. Hence, it is clearly evident that the assessee has booked purchases of Rs. 3,14,57,638/- on account of purchases and claimed under profit and loss accounts.
8. "The relevant extract of section 37 of Income Tax Act is attached herewith
(1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".
Explanation 3 For the removal of doubts, it is hereby clarified that the expression "expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law" under Explanation 1, shall include and shall be deemed to have always included the expenditure incurred by an assessee, -

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(i) for any purpose which is an offence under, or which is prohibited by, any law for the time being in force, in India or outside India; or (ii) to provide any benefit or perquisite, in whatever form, to a person, whether or not carrying on a business or exercising a profession, and acceptance of such benefit or perquisite by such person is in violation of any law or rule or regulation or guideline, as the case may be, for the time being in force, governing the conduct of such person; or (iii) to compound an offence under any law for the time being in force, in India or outside India.
On plain reading of section, it clearly says that if an expense is incurred in any form for any purpose which is an offence under, or which is prohibited by any law for the time being in force, that is considered as violation under law, that expenses are not allowed u/s 37 of Income
Tax Act.
9. Keeping in view the aforesaid position, Assessee company booked expenses from Sanjay Jain controlled firms. therefore, addition to assessee's income under Income Tax Act in respect of purchases that bills were manipulated so as to increase purchases and reduce profit in books of accounts, therefore, disallowance is justifiable to assessee's income. Hence, Rs. 3,14,57,638/- on account of purchase is being disallowed and added to the total income of the assessee under section 37 of Income Tax Act……”
6. Aggrieved with the addition made by the ld. AO, assessee agitated before ld. CIT(A), who proceeded to sustain addition only in respect of 20%
of the disputed purchases, amounting to Rs.62,91,528/-. Thus, as against addition of Rs.3,14,57,638/- made by the ld. AO, the ld. CIT(A) confirmed addition amounting to Rs.62,91,528/- only. The Revenue has assailed the impugned order with the grounds of appeals reproduced hereinabove. For the purposes of clarity, specific findings of the ld. CIT(A) are extracted herein below.

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“……8.7 In evaluating the evidence and submissions, it is clear that while the appellant has successfully addressed some of the AO's allegations, certain critical aspects remain unresolved. The verification of transport details and the submission of purchase invoices lend partial credibility to the appellant's claim. However, the absence of stock reconciliation records coupled with corroborative evidence from the statements of Sanjay Jain and Nikhil Sachar, establishes that the purchases in question were not entirely genuine.
8.8 It is also important to acknowledge that the corresponding sales and consumption of materials have not been disputed, indicating that the materials were procured through back-channel operations. In such situations, taxing the entire amount of alleged bogus purchases would be excessive and inconsistent with judicial precedents. Instead, it is more appropriate to estimate and tax the profit element embedded in these transactions, taking into account the nature of the industry and the specific 8.9 GST rate of 28%, inherently involves significant costs and margins. when routed through accommodation entry operators. Given the high GST rate of 28% on cement and the inherent costs associated with back-channel operations
(such as commissions and logistics), addition of 20% on the disputed purchases is deemed reasonable. This estimation adequately reflects the profit element involved in the transactions and aligns with the principle that additions must be based on fair and reasonable estimates. Although the Gujarat High Court in CIT vs. Simit P. Sheth upheld a GP addition of 12.5%, the higher GST rate and other circumstances in this case justify a slightly higher addition of 20%.
8.10 In light of the above findings, the addition made by the AC modified. Accordingly, 20% of the disputed purchases, amounting to 262,91,528/-, is sustained as taxable income. Above grounds of appeal are partly allowed……..”

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“The Income-tax Appellate Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the grounds of the Appellate
Assistant Commissioner on which the decision was given against the assessee or the department. The criticism made by the High Court that the Tribunal had “failed to perform its duty in merely affirming the conclusion of the Appellate Assistant Commissioner” is apparently unmerited.”
10. Accordingly, we are of the considered view that the order passed by the Ld. Assessing Officer therefore does not require any intervention at this stage. We therefore totally rely upon the order of the ld. AO. The principal enunciated by Hon’ble Apex Court in its above cited decision would hold equally to in the case of orders passed by Assessing Officer also. The order of the Ld. CIT(A) qua issues contested through grounds of appeal by the appellant Revenue is therefore set-aside. All the grounds of appeal raised by the appellant Revenue are therefore allowed.
11. As sated earlier, the facts of AY 2018-19 and 2019-20 also contested by the Revenue are identical to those in AY 2020-21. Accordingly, the decision in AY 2020-21 would apply mutatis mutandis to Revenue’s appeal for AY 2018-19 and 2019-20. Accordingly, the order of the Ld. CIT(A) for AY 2018-19 and 2019-20 qua issues contested through grounds of appeal by the appellant Revenue is also set-aside. All the grounds of appeal raised by the appellant Revenue for the two assessment years are also allowed.

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S.
No.
Appeal Nos.
AYs
Appellant
Result
1
2020-21

V K Ready Mix Concrete
Pvt. Ltd.
PAN AAECV6568K
Dismissed
2
2018-19

V K Ready Mix Concrete
Pvt. Ltd.
PAN AAECV6568K
Dismissed
3
2019-20

V K Ready Mix Concrete
Pvt. Ltd.
PAN AAECV6568K
Dismissed
4
2021-22

V K Ready Mix Concrete
Pvt. Ltd.
PAN AAECV6568K
Dismissed
5
2018-19
Assistant Commissioner of Income Tax, Central
Circle-30,
Allowed
6. 2019-20
Assistant Commissioner of Income Tax, Central
Circle-30,
Allowed
7. 2020-21
Assistant Commissioner of Income Tax, Central
Circle-30,
Allowed

Order pronounced in the open court on 19th December, 2025. [ANUBHAV SHARMA] [AMITABH SHUKLA]
JUDICIAL MEMBER

ACCOUNTANT MEMBER
Dated: 19.12.2025
Shekhar