ACIT, CC, AGRA, AGRA vs. HMA AGRO INDUSTRIES LIMITED, AGRA

(Assessment Year: 2022-23) (Assessment Year: 2023-24) ACIT, Central Circle, vs. HMA Agro Industries Limited, 2/220, 2nd Floor, Glory Plaza, Agra. Opp. Soor Sadan, M.G. Road, Agra – 282 002. (PAN :AACCH0450J) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Sudhir Sehgal, Advocate Shri Deependra Mohan, CA REVENUE BY : Shri Arun Kumar Yadav, CIT DR Date of Hearing : 13.10.2025 Date of Order : 04.12.2025 O R D E R

PER S. RIFAUR RAHMAN, AM:

for AY 2018-19 filed by the assessee against the order of PCIT u/s 263 and the brief facts of the case are as under:- i). The assessee is a Limited Company, engaged in the manufacturing business of Boneless Meat and Meat products and majority of the meat products are exported. ii). The original assessment was framed u/s 143(3) vide order, dated 09.04.2021, wherein, the addition of Rs. 1,08,00,000/- was made on account ‘excess salary’ paid to two employees u/s 40A(2b) of the Act. The said assessment was then subject matter of reassessment u/s 148 based on the reason to believe of the AO that the assessee had taken bogus purchase thro accommodation entries from one Sh. Md. Irfan. During reassessment proceedings, the AO issued summons to Md. Irfan and his statement was recorded on oath before the AO wherein, he admitted that he is engaged in trading of live animals and also and 4 ors. confirmed the sales made to the assessee and even filed the sample copies of the bills for three years. iv). The Assessing Officer also issued a specific query relating to transactions made with Md. Irfan and a reply was also submitted during the course of reassessment proceedings on this issue and thereafter, the speaking order was passed by the Assessing Officer with the approval of the Addll. Commissioner of Income Tax, Central Range, Kanpur, u/s 147/143(3) vide order, dated 31.03.2023 and no adverse view was drawn in respect of alleged accommodation entries from Md. Irfan, the AO accepted that genuine purchases had been made by the assessee from Md. Irfan and against which, payments have been made through banking channel and also that against such purchases sales of meat have been exported by the assessee out of India. v). Thereafter, after verification of the records of the reassessment proceedings, show cause notice, dated 09.04.2024 was issued u/s 263, wherein the PCIT stated that Md. Irfan had entered into huge sale transactions with the assessee and the amount as remitted by HMA Agro Industries Ltd. to Sh. Md. Irfan was immediately withdrawn in cash from his account and in some cases, the funds were transferred to other accounts. vi). It was further mentioned in the show cause notice that though, HMA Agro Industries Ltd. had stated that they had purchased alive animals from Md. Irfan. However, Md. Irfan could not substantiate sales to HMA Agro Industries Ltd. and rather it was stated in the show cause notice that Md. Irfan is a handling agent of HMA Agro Industries Ltd. It was further stated in the show cause notice by the PCIT that Md. Irfan is not carrying on any genuine business, he provides only bogus and 4 ors. purchase bills of purchases to HMA Agro Industries Ltd. and which in turn, transfer funds to his bank account against these bills. It was also stated that AO finalized the assessment in the case of Md. Irfan, after making the addition of Rs. 62,11,24,558/- on ‘protective basis’ u/s 68 r.w.s 115BBE of the Act, with a finding that substantive addition be made in the hands of beneficiary being the assessee HMA Agro Industries Ltd. It was further stated in the show cause notice that the AO has failed to examine and establish the modus operandi of bogus purchases and, thus, it was stated that the assessment being erroneous and prejudicial to the interest of revenue and the assessee was asked to reply to the same. vii). The assessee submitted a detailed reply during the course of proceedings u/s 263, stated that the Assessing Officer in the proceedings u/s 148 which were reopened on this issue of alleged bogus purchases from Md. Irfan, had examined each and every issue and even the statement of Md. Irfan was also recorded by the AO u/s 131, in which, Md.Irfan confirmed the supply of Alive animals to the assessee and regarding the withdrawal of cash from his bank account, partially he stated that the payment had to be made to suppliers of buffalo and, as such, cash withdrawals were made and it was further stated that the AO has applied his mind to the facts and circumstances of the case and, thus, possible view has been drawn and besides, that the assessee relied on number of case law on the issue that where there is due application of mind and possible view has been taken, the proceedings u/s 263 deserves to be dropped. viii). The Ld PCIT has given his finding from para 6.1 and para 6.2, he came to the conclusion that bogus purchases have been made by the assessee and there being immediate cash withdrawal transactions into various and 4 ors. dummy account by Md. Irfan and also cash withdrawals prove the modus operandi of providing the accommodation entries and there is non- application of mind on the part of the AO as necessary verification has not been made and, thus, the case was covered under clause (a) of explanation-2 of section 263 and by relying upon various case law, set aside the order passed by the AO u/s 147/143(3) with a direction to pass a fresh order after conducting proper enquiries.

1. That the learned Principal Commissioner of Income Tax has erred in law and on facts in initiating the proceedings u/s 263 of the Act.

2. That the learned Principal Commissioner of Income Tax has erred in law and on facts in setting-aside the assessment order passed u/s 147/143(3) merely on difference of opinion, wherein the issue of purchases from Shri Mohd. Irfan was already accepted after detailed scrutiny, analysis and examination thereof done by Ld. A.O. in re- assessment proceedings.

3. That the learned Principal Commissioner of Income Tax has erred in law and on facts to initiate the proceedings, when the original proceedings have been completed with the approval of Additional Commissioner of Income Tax. Hence, the proceedings have been completed after proper monitoring by the competent authority.

4. That the learned Principal Commissioner of Income Tax has erred in law and on facts in passing the order u/s 263 neither taking proper cognizance referring to the assessment records and detailed enquiries made by the Ld. AO and nor considering replies and submissions made by the appellant.

5. That the order of the learned Principal Commissioner of Income Tax u/s 263 of the Income Tax Act is arbitrary, unjust, merely based on presumptions and that no error existed, or prejudice was caused to and 4 ors. the revenue therefore, the order of the Ld. P. Commissioner of Income Tax passed under section 263 of the I.T. Act. deserves to be quashed.

6. That any other relief or reliefs deemed fit in the facts and circumstance of the case may be granted.”

C. Thereafter, SCN notice u/s 148A(b) was issued on assessee dated 15.03.2022, alleging that, the assessee had taken bogus accommodation entries from one Sh. Md. Irfan S/o Sh. Meharban. Copy placed in the paper book as “Annexure C.”. In response to that, assessee submitted its reply on 22.03.2022 attached with this brief, wherein assessee submitted that, the assessee had only made purchases of ‘Alive animal’ from the above said party, which is accounted in audited books of accounts of assessee and copy of ledger account of the said party was also filed. However, the reply filed by the assessee was considered and notice u/s 148A(d) & notice u/s 148 for initiating of reassessment proceedings D. Further, during the course of reassessment proceedings, the AO made an enquiry from the Md. Irfan vide summons issued dated 26.03.2023 forming part of Supplementary paper Book at page 1,and the statement of Md. Irfan recorded on oath, wherein he had admitted that, he is engaged in trading of Alive animals and also confirmed that, he had made sales to assessee and also the documentary evidences in form of “Copy of account, sample bills for three years” were filed by Md. Irfan at the time of recording statement, copy of referred statement is forming part of paper Book 1 referred as Annex-D.

E. Further specific query vide questionnaire issued on 11.01.2023 was raised on assessee relating to transactions made with the Md. Irfan alongwith following details as under, placed at Supplementary Paper Book- Page- 6 to 8. a) Audited books of account of the assessee. b) Nature of activities being carried out in the assessee business. c) Complete bank statement of the assessee for the year under consideration. d) Computation of income of the assessee. e) Details of transaction made by assessee with Md. Irfan S/o Meherban i.e. Details of purchase made by the assessee, copy of invoices, transportation slips, weight slips and relevant extract of bank statements highlighting the transaction made by the assessee with regards to purchases made from Sh. Irfan.

G. Further, the Ld. AO after satisfying with the reply filed by the assessee alongwith the statement of Md. Irfan recorded on oaths., passed an assessment order u/s 147/143(3) vide order dated 31.03.2023 confirming the addition made in original assessment order framed u/s 143(3) and specific finding at para No. 5 of the assessment order as given as under:-

After considering the details and explanations filed by the Assessee/Authorized representative and in view of the facts and circumstances of the case, assessment is completed u/s 147 of the Income Tax Act, 1961 at the total income of Rs. 49,57,35,180/- as originally determined by the Assessing Officer in the assessment order dated 09.04.2021. Notice of demand and challan is issued accordingly.

H. From the above sequence of events and documentary evidences, it is very much clear that the AO was well aware about the reasons for reopening of the assessment u/s 148 and he took all the step to verify the transactions with Md. Irfan and recorded his statement issued questionnaire & looked into the reply of the assessee and, applied his mind and, thus, once the AO has raised specific query with regard to the issue during assessment proceedings, then, the PCIT cannot sit over that the judgment of the Assessing Officer concerned.

I. The PCIT, thereafter, issued a Show cause notice, u/s 263, dated 09.04.2024 and copy of the same has been enclosed alongwith these submissions and the same has been raised about the bogus accommodation entries with Md. Irfan and has mentioned that since and 4 ors. there is a cash withdrawals from the bank account of Md. Irfan, that is returned back to the company. J. It is submitted that the statement of Md. Irfan as recorded by the AO during assessment proceedings is very much clear where, he had denied that he is engaged in providing accommodation entries and further, furnished ledger copies for the financial year 2016-17, 2017-18 and 2018-19 and stated that, whatever, amount is received on sale of alive animal, the same is paid to farmers from whom alive animals are purchased. He explained the detail of the transfer entries from his bank account and then, he has stated that he had withdrawn the cash for making payment to the farmers from whom, the alive animals have been purchased. Thus, the statement is absolutely clear and the PCIT cannot sit over the judgment of AO and, further, the PCIT, in his order u/s 263 has invoked clause (a), Explanation-2 to section 263, that the order has been passed without making any enquiries or verification.

K. It is submitted that the detailed verification/enquiries have been made and what more enquiries were liable to be carried out by AO had not been specified by the PCIT and has relied upon certain judgements, which are totally out of context, because in those cases, requisite enquiries had not been made. We are relying upon the judgment of Hon’ble Apex Court in the case of V-Con Integrated Solutions (P.) Ltd. [2025] 173 taxmann.com 774 (SC)/[2025] 304 Taxman 598 (SC)/[2025] 476 ITR 526 (SC)[04-04-2025],where the judgment of Hon’ble Punjab & Haryana High Court cancelling the order of PCIT has been upheld and following finding have been given:-

(i) INCOME TAX : SLP dismissed against order of High Court that where Pr. Commissioner invoked revision and 4 ors. proceedings on ground that Assessing Officer had not made sufficient inquiries regarding share capital, however, he had not pointed out any further inquiries which were required to be made by Assessing Officer, Tribunal was justified in quashing order of Pr. Commissioner. (Share capital) - Assessment year 2018-19 - Assessee- company received share capital of certain amount - Assessing Officer passed assessment order accepting share capital received by assessee - Principal Commissioner invoked revisionary jurisdiction under section 263 on ground that Assessing Officer had not made any enquiry in respect of share capital received by assessee - It was noted that Assessing Officer had issued a questionnaire and had also asked for documents, which were answered and furnished to Assessing Officer by assessee - Same were also informed to Principal Commissioner, who ensued proceedings under section 263 - However, Principal Commissioner had not pointed out any further enquiries which were required to be made by Assessing Officer in this case - High Court by impugned order held that since Assessing Officer had made adequate inquiries, order passed by Principal Commissioner under section 263 was rightly quashed by Tribunal - Whether power under section 263 can be exercised by Commissioner, but by going into merits and making an addition, and not by way of a remand, recording that there was failure to investigate - Held, yes - Whether Commissioner must record abject failure and lapse on part of Assessing Officer to establish both error and prejudice caused to revenue - Held, yes - Whether order passed by High Court, which upheld decision of Tribunal was correct on facts and in law and, thus, SLP filed by revenue against impugned order of High Court was to be dismissed - Held, yes [Paras 2, 4, 5 and 6] [In favour of assessee] ii). Reliance is being placed on the judgment of CIT Vs. Nirav Modi, 77 Taxmann.com 15 (SC), in which, it has been held as under:- and 4 ors. “Section 68 read with section 263, of the Income-tax Act, 1961 - Cash credit (Gift) Assessment years 2007-08 and 2008-09 - Assessee received certain amount as gifts from his father and sister who were non-residents in India - Assessing Officer after making detailed enquiries, took a view that assessee had duly proved identity, source and creditworthiness of donors - Commissioner, however, passed a revisional order under section 263 directing Assessing Officer to enquire into capacity of donors and to decide about genuineness of gifts afresh - It was noted that Commissioner in his order of revision, did not indicate any doubt in respect of genuineness of evidence produced by assessee - Moreover, satisfaction of Assessing Officer on basis of documents produced was not shown to be erroneous High Court by impugned order held that it was a case where a view had been taken by Assessing Officer after making proper enquiry and, thus, Tribunal was justified in setting aside impugned revisional order - Whether Special Leave Petition filed against impugned order was to be dismissed - Held, yes [Para 2] [In favour of assessee]” iii). Reliance is also being placed on the judgment of Apex Court in the case of PCIT Vs Shreeji Prints (P) Ltd., reported in 130 taxmann.com 294 (SC)., in which, it has been held where a view has been taken by the AO after making proper enquiry and, thus, the Tribunal was justified in setting aside the impugned assessment order. iv). Reliance is being placed on the judgment of Hon’ble Delhi High Court in the case of ITO Vs G.Housing Project, reported in 343 ITR 329, in which it has been held that if requisite enquiries had been made by the AO, during assessment proceedings, and taken a view then the PCIT cannot sit over such order of AO and cancel the same. v). Exotic Relators and Developers vs. PCIT as reported in (2024) 71 CCH 0299 Chd-Trib.

“AO having issued successive notices under ss. 142(1) and 143(2) from time to time to the assessee raising numerous queries and framed the assessment after considering the replies submitted by the assessee, the assessment order passed by the AO cannot be said to be erroneous and prejudicial to the interests of the Revenue and, therefore, the impugned order passed by the Principal CIT in exercise of his revisionary jurisdiction under s. 263 is bad in law, more so as he himself has not made any minimal enquiry before holding that the AO has not made any enquiry; inadequate inquiry or insufficient inquiry cannot be a ground to order revision of assessment under s. 263.” vi). Reliance is being placed on the judgment of Loil Continental Foods Ltd. Vs PCIT, in (Chd-Trib.) vide order, dated 04.12.2019, in which, in para 17 of the judgment, it has been held as under:- “17. The ld. CIT made reference to the Explanation-2 to Section 263 and also decision of Hon’ble Supreme Court in the case of CIT Vs. Amitabhachan, 384 ITR 200. It is pertinent to note that Explanation-2 of section 263(1) would help the ld. Commissioner to take cognizance under section 263 of the Act, if no inquiry was conducted by the AO before finalizing the assessment order. No doubt the assessment orders are very brief, and did not have elaborate discussion on these issues, but it is pertinent to bear in mind that assessees have no control over the AO and cannot persuade him to draft the assessment order in a particular manner. It is the discretion of the AO, how to pass an assessment order. Had an elaborate discussion available, then that would be an ideal situation for the higher appellate authorities to appreciate, what has operated in the mind of the AO while passing the assessment. But in the absence of such discussion, it has to be ascertained from the questionnaire and the replies submitted by the assessee. Explanation-2 can be invoked when no inquiry was conducted by the AO. In the present case, he has issued a questionnaire and 4 ors. calling for details on 37 counts. Those details were submitted. Some of the issues raked up by the ld. Commissioner in the impugned order were between the group concerns, and their accounts were open before the AO in simultaneous proceedings. He was satisfied with these accounts. Thus, it is a case of inquiry and Explanation-2 cannot be invoked in the present case. In view of the above discussion, we are of the view that the ld. Commissioner is not justified in exercising powers under section 263, and setting aside the assessment orders. We allow all these appeals and quash the impugned orders passed under section 263 of the Income Tax Act in each case of the appellants. vii). Commissioner of Income-tax vs. Arora Alloys Ltd. [2015] 60 taxmann.com 67 (Punjab & Haryana)/[2015] 370 ITR 732 (Punjab &Haryana)[21-07-2014] Section 69C, read with section 263, of the Income-tax Act, 1961 - Unexplained expenditure (Statements made before other authorities, relevance of) - Assessment year 2005-06 - Assessee- company was engaged in business of manufacturing of non- alloys steel ingots, trading in scrap, etc. - Subsequent to assessment, Commissioner invoked jurisdiction under section 263 on basis of statement made by director of assessee-company before Central excise authorities in context of levy of excise duty on unaccounted production - Thereafter, he made additions on account of unexplained purchases and sales - It was observed that revenue had not collected any independent material to arrive at conclusion that there were unexplained sales or purchases made by assessee - Whether where additions made were solely based on statement made by director of assessee-company before Central Excise Authorities, same could not be sustained - Held, yes [Para 10] [In favour of assessee] viii). PCIT Vs M/s Clix Finance India Pvt. Ltd. ( 2024) (3) THI 157-Delhi High Court and 4 ors. L. We are enclosing herewith our reply to PCIT in response to notice u/s 263, dated 2nd of July, 2023, in which, we have cited number of case laws that since the order u/s 143(3) was passed after approval of Addl. CIT, Central Range, Kanpur and under such circumstances, the PCIT cannot exercise his power u/s 263 and reference is being made to the judgments quoted from page 5 onwards and other judgments about the application of mind.

M. The assessee is response to the SCN notice u/s 263 filed his reply dated 02.07.2024 wherein assessee has given his submission that, the assessment being initiated in the case of the assessee is merely on some difference on opinion and also given the reference of statement of MD. Irfan recorded at the time of assessment, wherein he has confirmed that he has sold lives stocks animals to assessee and books of Irfan payment of which have been made through banking channel and recorded in the Audited books of the account of the assessee and also assessee relied upon various case laws of the different Tribunals, wherein it has been clearly held that the revision merely based on change opinion not permitted.

N. Further, it is submitted that we are submitting herewith the copy of order of CIT(A) in the case of Mr. Irfan in AY 2018-19 wherein on same issue was there in his case relating to “alleged accommodation entries provided to assessee worth of Rs. 62,11,24,560/-” and your goodself attention in invited towards the page 4 of the order of Md. Irfan, wherein ground no 2 specifically relating to addition of Rs. 62,11,24,560/- and the CIT(A) in the case of the Md. Irfan had wrote an email to the DCIT, Central Circle – AGRA on 08.11.2023 case of O. From the above findings of the AO given in the case of assessee on the concerned issue in the case of Md. Irfan, the CIT(A) has allowed the appeal of the Md. Irfan as per relevant findings at para 6.6 page 13 of the order of CIT(A). Copy of the order of CIT(A) has been filed in the Paper Book as “Annexure F”.

P. From the above facts, it is submitted before your goodself that, there is no failure on the part of the assessee as well as assessing officer in conducting any enquiry before passing the assessment order u/s 147 and the same enquiry have been referred in the case of the Md. Irfan. Though, it is very established that, this is not a case of lack of enquiry, therefore it is mere a change of opinion of the Ld. PCIT in invoking the provisions of section 263 read with Explanation 2 clause (a) and since adequate and due enquiries have been made, no case of 263 could be made by PCIT. In view of above said facts and case laws, the order as passed by the PCIT u/s 263 deserves to be set aside.

by the assessee are allowed.

11. In the result, appeal filed by the assessee being for AY 2018-19 is allowed.

12. Now we take up Revenue’s appeal being Assessment Year 2019-20 as lead case for all the Revenue’s appeals.

Department against the order of CIT (A), Kanpur-4 and the facts as per the assessment order are that the assessee is a Public Limited Co. involved in the business of manufacturing, processing and export of meat and meat products. Search and seizure action u/s 132(1) was carried out on 05.11.2022 at the residential and business premises of HMA Agro Industries Ltd. and various documents, books of accounts and other records were seized.

and 4 ors. vii). It was further held that the AO has mis-interpreted the statement of parties and drawn a wrong conclusion about the supplies of raw Boneless meat and in respect of Israr Ahmad, it was a case of mistaken identity and similarly other parties have also not denied any sales of raw boneless meat and for Elahi Trading Co., confirmed copy of account had been submitted, where sales of Raw Boneless Meat had been recorded. The CIT(A) also held at page 21 that the cases of the suppliers were also simultaneously taken by the AO and their assessments had been framed u/s 147/143(3) as per chart reproduced at page 21 of the order of CIT(A). It was further stated that the assessee have filed reconciliation of GST paid, along with annual return of GST and purchases were backed by invoices and all the payments were being made by cheque and further no conclusive evidence had been led that the purchases were bogus and the reliance was made by the CIT(A) on various case laws of Hon’ble Apex Court, High Courts and different Benches of the ITAT at pages 23 to 26 of the order and the CIT(A) has given his finding at para 7.8 of the order, in which, he has held that allegation of round tripping of funds is not substantiated at all and also the sales have not been doubted, the stock record have not been commented adversely and sales and purchases are two sides of same coin and hence to dispute the purchases from such major and 4 ors. suppliers in the hand of assessee and treating the same as bogus purchases would not be justified and, thus, deleted the addition of Rs. 90,95,46,485/-. viii). The second issue of alleged bogus purchases from Md. Irfan have been discussed at para 8.1 of the order and he referred to written submissions made before the AO from page 32 to 35 along with basis of reopening of the case u/s 148 and also considered the detailed submissions which have been reproduced by the CIT(A) in para 8.3 of the order, on account of purchases from Md. Irfan and considered at length the reply of the assessee on this issue from page 36 to page 40 of the order of CIT(A), further stated that there was no basis of making the disallowance of 109,94,70,000/- out of the total purchases of alive animals to the tune of Rs. 170,70,52,786/- without pointing out specific purchases to be bogus, and it was only on the basis of doubt and suspicion, the AO has made the addition and there is no basis of making addition of Rs. 109,94,70,000/- on account of cash withdrawals by Md. Irfan. ix). The Ld CIT(A) has given his finding from page 40 onwards after considering various case law and facts and circumstances of the case have given his categorical finding from para 8.11, at page 48 of the order, have held that the assessee company a producer and exporter of and 4 ors. frozen meat and when the sales which are mostly exported and got the custom clearance and necessary approval from APEDA is there and which have been accepted by the AO and Md. Irfan have also accepted such sales, relevant the payments have been made through banking channels by the assessee. He has held that there is no basis of making the disallowance of Rs.109,94,70,000.

1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-IV, Kanpur has erred in deleting the addition of Rs. 90,95,46.485/- on account of bogus purchase of Raw Boneless Meat, without appreciating the fact that some of the suppliers of raw boneless meat, under verification u/s 133(6) of the Act, have denied to have supplied any raw boneless meat to the assessee & payments made against purchase of raw boneless meat have been routed through M/s S.M Agri Exports Pvt. Ltd. and M/s. Maharashtra Food Processing and Cold Storage and the assessee company has been the ultimate beneficiary of the same.

2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-IV, Kanpur has erred in deleting the addition of Rs.109,94,70,000/- on account of bogus purchase of Raw Boneless Meat from Sh. Ifran, without appreciating the fact that assessee admitted the facts that cash withdrawals of Rs. 109,91,70,000/- have been withdrawn only and in view of this facts as admittance by the assessee on the issue, the respective addition was made in the assessment order.

3. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-4, Kanpur has erred in deleting the addition, without appreciating the facts that the Assessing Officer has passed the assessment order after thoroughly examining and analysing the seized material and proper appreciation of facts of bogus purchase of Raw Boneless Meat.”

16. At the time of hearing Ld DR submitted that the search was conducted on 05.11.2022. He brought to our notice para 7.1 of assessment order and submitted that the assessee purchased the raw boneless meat (RBM) from various parties over the years, in this regard, he brought to our notice the statement purchases from various parties over the years, it is reproduced at para 7.1. He submitted that the above purchases are not in line with the business module of the assessee nor under APEDA guidelines. He also brought to our notice the statement of Mr. Zulfiquar Ahmed Qureshi. Further submitted that some of the parties have stated that they do not trade in raw boneless meat. Further some of the suppliers stated that RBM was an R&D done at the assessee company. He submitted that the AO had clearly brought on record that the cash transactions are nothing but round tripping of cash back to the assessee company. All these transactions are nothing but bogus purchases. The material clearly indicates that it is only round tripping of cash and objected to the findings of Ld CIT(A) and submitted that Ld CIT(A) had accepted the circumstantial evidences to give benefit to the assessee without proper appreciation of findings of AO. Accordingly, he relied on the findings of AO.

17. On the other hand, ld. AR of the Assessee submitted as under :- I. The assessee is the third largest meat exporters in India and has supplied the Frozen Meat to many countries and no discrepancy or any and 4 ors. fault has been noticed by the Assessing Officer, in so far as, supplies of meat by the assessee company, which is exported. However, some of the purchases have been doubted and the assessee is in possession of complete invoices/documents of the purchases and copies of account of all the suppliers, from whom, the purchases have been made and the payments made through banking channels to suppliers and above all, the same Assessing Officer has framed the assessments of majority of the suppliers and no adverse view have been drawn by the Assessing Officer in their cases. II. During the year under consideration, the total turnover of the assessee is Rs. 2742,22,98,474/- and the Assessing Officer during the course of assessment proceedings have raised two issues regarding the bogus purchases and they are as under:- i). Addition on account of purchases of Raw Boneless Meat ii). Addition on account of purchases from Mr. Irfan PURCHASES OF RAW BONELESS PURCHASES MEAT a). This issue has been discussed by the Assessing Officer from para 7.1, page-2 of the assessment order. b). The Ld. CIT(A) has discussed this issue from para 7.1., page 5 of his order and in the order of CIT(A) from pages 5 to page 13, he has discussed about the basis of addition made by the AO and the reply to show cause notice of the Assessing Officer by the assessee has been reproduced by the CIT(A) from page 8 to page 9 of his order. c). The submissions of the appellant before CIT(A) on each and every issue with regard to the above addition have been reproduced from pages 9 to page 13 of the order of CIT(A) and and 4 ors. various cases laws on this issue of bogus purchases from pages 13 to 19 of the order of the CIT(A). d). The Ld. CIT(A) from para 7.6, page 19 to page 22 has discussed about the basis of AO regarding the addition on account of ‘Raw Boneless Meat’ and then referred to number of judgments starting from para 7.7 that, when sales have not been doubted, the purchases cannot be said to be bogus and after relying upon number of case laws, starting from pages 23 to 26, he has given a categorical finding in para 7.8 to 7.9 of the order at page 27 to 29 and deleted the addition. While deleting the addition, the Ld.CIT(A) has discussed in detail in para 7.7 of his order each and every argument relied upon by the AO, for which, the reliance have been made on certain enquiries made by the AO from three parties and discussed as under:- i). The Assessing Officer issued notice u/s 133(6) to one of the supplier ‘M/s Imlakh Traders’, whose Proprietor is Md. Imlak Ahmmed and the reply was received from ‘Mr. Ishrar Ahmad’ Prop. Imlak Traders, who denied having made any sales to the assessee of ‘Raw Boneless Meat’ and copy of the letter as filed by Mr. Ishrar Ahmad, dated 05.03.2024, have been reproduced at pages 8 & 9 of the assessment order and, thus, it was held to be a case of mistaken identity. Hence, no adverse view could be drawn in respect of this issue. Reply at page 10 to 11 of the order of the CIT(A). ii). The CIT(A) also referred to the reply filed by the assessee in response to notice issued by the AO u/s 133(6) to M/s Elahi Trading Co., which reply has been reproduced by and 4 ors. the AO at pages 6 to 7 of the assessment order, in which, he has stated he has supplied ‘live buffaloes’ and had not sold any boneless meat to HMA Agro Industries Limited. The assessee had relied upon his reply to show cause notice of the AO and which have been reproduced in para 2, page 10 of CIT(A) order, in which, it was stated that M/s Elahi Trading Co. had made the sales to the tune of Rs. 17,58,46,131/- of Live Animals and he has confirmed his copy of account and it is only on account of one bill, dated 21.12.2918 for Rs. 4,01,172/-, in which, he mentioned as ‘Buffaloes Caracas’ Sale and further, the same has not been confronted to the assessee, even, though the request was made. iii). In so far, MAQ Traders, he has not made sales during the Assessment Year 2019-20 and, thus, no adverse view needed to be drawn and no sales have been made is borne out from page 3 of the AO’s order and same has mentioned at pages 10 to 11 of CIT(A) order and in para 7.7. of the order of CIT(A), page 20, has been given by CIT(A). iv). Further, Sh. Zulfiquar Ahmed Qureshi, KMP, stated that the Raw Boneless Meat was procured by the appellant company for a short duration of time and it was not found to be feasible and hence was discontinued later on. Similar, is the statement of Mr. Shoaib Ahmed, one of the key supplier. All such discussion have been analyzed and discussed by the CIT (A) in para 7.6 to 7.7 of the order, Pages 19 & 20 and further the CIT(A) at page 21 has and 4 ors. relied upon the fact that in the case of suppliers of the goods, their cases were also taken up by the same AO and no adverse has been drawn in respect of such supplies made to HMA Agro Industries Ltd. as per page 21 of the order of CIT(A). e). The other undisputed findings held by the CIT(A) are as under:- i). The corresponding purchases for ‘Raw Boneless Meat’ cannot be disbelieved or disallowed, since the sales were made by the appellant, not doubted and the appellant has also produced the production details of frozen meat in quantity. ii). The suppliers are regular tax payers and they have filed their ITRs and computation of Income. iii). The purchase invoices clearly mention the detail of ‘Raw Boneless Meat’. iv). All the payments/ for purchases have been made through banking channels. v). Copies of account of the suppliers, alongwith their assessment orders filed and no adverse view drawn in their cases. IV. The Ld. CIT(A) has then given his finding in para 7.8 as under:- a). Mostly the export sales are there, which have undergone custom clearance. b). The necessary approval from the APEDA have been taken and under such circumstances, the bogus purchases cannot be upheld. c). The Assessing Officer has not disputed the stock record and yield of the appellant company. and 4 ors. d). No incriminatory material have been brought on record. e). The statements as given by the suppliers have been misinterpreted and rather all the facts having been provided to the AO. f). No case of inflation made out by the AO by taking the alleged accommodation entries in the form of alleged bogus purchases as day to day stock record have been maintained. g). Quantitative records of the Live Animals and Others on the day of arrival has been maintained in day to day register, no defects pointed out. h). No case of bogus sales made out by the AO. i). Allegation of round tripping of funds, no evidence is there, since such screenshots did not relate to assessment year 2019-20. j). Though, the number of case laws have been relied upon by the CIT(A), we are submitting herewith gist of further judgments on the issue of bogus purchases and, thus, the CIT(A) has rightly deleted the addition. V. ADDITION OF BOGUS PURCHASES FROM IRFAN a). This issue has been discussed by the AO in para 7.5, page 46 of the order. This issue is on the basis of order u/s 148A (d) and, thus, it appears that no incriminating material regarding the above said addition is there and the AO has made an addition to the tune of Rs. 109,94,70,000/-. The facts are that there has been total credits in the bank account of Sh. Irfan amounting to Rs. 170,70,52,766/- and it was found that all such credit entries are on account of the amount remitted to Sh. Irfan on account of purchases made by M/s HMA Agro Industries Ltd. and, thus, it was stated that these are genuine payments against purchases. and 4 ors. The assessee furnished the ledger account of Irfan, duly confirmed. b). The reply of the assessee has been reproduced by the AO at pages 48 to 51 of the assessment order. The submissions of the assessee were as under before the AO:- i). There are no cash withdrawals made by the assessee M/s HMA Agro Industries Ltd. ii). There is contradiction in the information with the AO, wherein, initially, it was stated that there are cash withdrawals of Rs. 170,70,52,786/- by Mr. Irfan and it needs to be examined and it was also alleged that Mr. Irfan was the Handling Agent of HMA Agro Industries Ltd. iii). We have made all the payments to Irfan through banking channels against the purchases made by the assessee and Irfan had supplied Live Animals and the same has been confirmed by him. iv). There is no tangible information received by the AO from DCIT, CC, Ghaziabad and no opportunity to cross examination have been afforded and Mr. Irfan had not stated to them that he has not supplied the goods to us. v). Further, if certain withdrawals have been made by Mr. Irfan from his bank accounts, we are not liable to explain that. vi). In fact, there are cash withdrawal from the bank account to the tune of Rs. 109,94,70,000/-. vii). The assessee had duly recorded purchase transactions in the audited books of accounts. and 4 ors. viii). The arrival of ‘live animals’ register have been seized, which proves the purchases made by us are authentic. ix). During the course of assessment proceedings for Asstt. Year 2018-19, Mr. Irfan in his statement recorded by the same AO, has accepted the sales made of Live Animals, to HMA Agro Industries Ltd. x). This has been discussed by the CIT(A) starting from para 8, page 29 of his order. xi). The Ld. CIT(A) has reproduced the reply of the Show cause notice of the AO from pages 32 to 35 of his order and then, the assessee’s submissions before the CIT(A) have been reproduced at pages 35 to page 40 of his order and following submissions were made:- a). Mr. Irfan has stated that he was doing the sale and purchase of Life Animals from Agriculturist and then selling the same to assessee concerned, which were then slaughtered by the assessee and ultimate export of frozen meat as stated during the course of proceedings for Asstt. Year 2018-19. b). Copy of purchase vouchers depicting the number of animals, weight, of animal. c). Copy of purchase summary showing the number of animals their weight and average weight which have been categorized according to the categories of animal like 130 kg below, 130 kg up, 170 kg below, 170 kg up. d). Weight sheet of the animals so supplied depicting the arrival date, time, for each and every animal to prove and 4 ors. that the animals were received at our slaughterhouse for the entire year. e) The quantitative tally of animal purchased, meat produced, sales made at Khurja factory. f). The GST summary for the impugned assessment year showing the sale of frozen meat at Khurja unit -1, along with division wise output GST tax liability and Form GSTR 9 which is the annual return for GST paid on the sales so affected. g). All the said purchases have been duly entered into animal arrival register at our Aligarh plant and then they were slaughtered and the frozen meat was further exported to different countries after following due procedure as prescribed by law. h). No discrepancy of any sorts was there in the said stock records also. i). Our purchases from Mr. Irfan from Asstt. Year 2018-19 has been accepted. j). There is no basis of cash withdrawals made by Mr. Irfan from his bank account as the basis of addition in the hands of assessee and which purchases viz-a-viz invoices Numbers has been treated as bogus, has not been quantified by the AO. k). It is a settled fact that even payment for purchase of Live Animals is exempt from the provisions of section 40A(3) as per rule-6 DD. The books of accounts of the assessee have not been rejected u/s 145(3) meaning thereby that all entries as recorded in the books of and 4 ors. accounts are correct and, thus, when the books of accounts have not been rejected, no addition could be made as per decided case laws. VI. The finding of the CIT(A) in para 8,5 and 8.6, page 40 to page 50 is being relied upon, wherein, he has relied upon the statement of Mr. Irfan, who has confirmed supplied Live Animals to the assessee. VII. Further, the entire amount credited in the bank account of Mr. Irfan have not been withdrawn. VIII. Further, out of Rs. 170,70,52,786/-, purchases of Rs. 60,75,82,786/- have been considered to be genuine. If those purchases are genuine, there is no basis of making the addition of Rs. 109,97,70,000/- on account of Bogus Purchases and Mr. Irfan has stated that the withdrawal of cash is to make the payments to the farmers who supply Alive animals to assessee. IX. There is no evidence of the cash withdrawals by Mr. Irfan taken/handed over to the assessee. X. The quantitative detail from Mr. Irfan giving the detail of ‘Live Animals’ bought from Mr. Irfan and GST have been paid, the sales have not been doubted and then by relying upon the various judgments, the finding has been recorded in para 8.11, page 48 and which is being relied upon.

28. To sum up : in the result, appeal filed by the assessee for AY 2019-20 is allowed and appeals filed by the Revenue in AYs 2021-22, 2022-23 and 2023-24 are dismissed. Order pronounced in the open court on this 4th day of December, 2025.