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Facts
The assessee's appeal was against an order of the NFAC, Delhi for AY 2012-13. The core issues involved the validity of reopening under Section 147/148 and additions made on account of alleged bogus purchases.
Held
The Tribunal held that the reopening under Section 148 was valid as the AO had sufficient information and followed due procedure. However, regarding the merits, while accepting that the assessee had disclosed sales and quantitative details were not disputed, the entire addition for bogus purchases was not sustained. The Tribunal determined a profit of 5% on the alleged bogus purchases over and above the regular profits disclosed.
Key Issues
Validity of reassessment proceedings initiated under Section 147/148, and substantiation of alleged bogus purchases and quantum of addition.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT
Before: DR. B.R.R. KUMAR, VICE- & MS. SUCHITRA KAMBLE
O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER:-
This is an appeal filed against the order dated 31-07-2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2012-13
With regard to the additional ground taken up before us regarding reopening was that the assessee was not given the statement and was not given opportunity to cross examine Shri Narendrakumar Narayandas Agrawal. Besides this the Ld. AR also submitted that the reopening was based only on DDIT (Investigation) Information. The notice u/s 148 of the Act was issued on 29.03.2019 without doing proper inquiry by the Assessing Officer as per Ld. AR. We find that all these contentions does not sustain for the reason that there was sufficient information received by the AO and after going through the said Mahavir Agro Industries Vs. ITO Asst. Year : 2012-13 - 2– information and also that of the statement alongwith other material the Assessing Officer with proper approvals and after recording the reasons, has issued notice under Section 148 of the Act. There is no procedural or legal lapse on part of the Assessing Officer while issuing the notice under Section 148 of the Act. The case laws submitted by the Ld. AR are not be applicable in the present case as the Assessing Officer has recorded the detailed reasons. Hence, additional grounds are dismissed.
As regards merits of the case, the assessee has allegedly made bogus purchase of Rs.48,53,545 from three parties named Shyam Baba Trading Co., Balaji Agro Tradelink and Sai Baba Trading Company which were operated by Narendrakumar Narayanlal Agrawal (an accommodation entry provider). Shri Narendrakumar Narayanlal Agrawal also stated in his statement that the assessee was one of the beneficiaries of the accommodation entries and he never delivered any goods to the assessee. The assessee has given details of payment for purchase but has not given any other relevant documents relevant to the actual goods movement and delivery by the said parties either before the Assessing Officer or before the CIT(A). However, the revenue has accepted the sale of the assessee and the quantitative details are not disputed therefore, the entire addition cannot sustain. The assessee had turnover of Rs. 15 crores and the bogus bills were alleged to be of Rs. 48 lakhs. Keeping in view the entire facts of the case and the established jurisprudence, we deem it fit to determine the profit to the extent of 5% of the purchases
In the result, the appeal of the assessee is partly allowed.
The order is pronounced in the open Court on 21.01.2026