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Facts
The assessee, a rice miller, reported a gross turnover of Rs. 27.10 crore. During a survey operation, it was found that some of the assessee's suppliers were involved in issuing bogus bills. Consequently, the Assessing Officer disallowed 25% of the unverifiable purchases, amounting to Rs. 2,35,26,250/-, which was upheld by the CIT(Appeals).
Held
The tribunal noted that the issue of bogus purchases by rice millers is sub-judice before the jurisdictional High Court in several similar cases. Therefore, the tribunal set aside the CIT(Appeals)'s order and remanded the matter back to the CIT(Appeals) to await the High Court's decision before adjudicating de novo.
Key Issues
The key legal issue is the disallowance of purchases based on allegations of bogus billing by suppliers, particularly in the context of rice millers, where similar matters are pending before the High Court.
Sections Cited
Section 133A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 18.06.2025 for the assessment year 2016-17 as per the grounds of appeal on record.
2. At the time of hearing none appeared for the assessee. However, an adjournment petition has been filed which is rejected. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record.
The brief facts in this case are that during the year under consideration the assessee had declared gross turnover of Rs.27.10 crore and reported purchases of Rs.25.66 crores. On the basis of information gathered during the course of survey operation conducted u/s. 133A of the Income Tax Act, 1961 (for short ‘the Act’) at the business premises of certain rice millers and brokers based at Raipur and Tilda, the A.O noted that a group of rice millers and entry operators were engaged in issuing accommodation entries in the form of bogus bills. It was also noted by the A.O that certain suppliers of the assessee such as Shyamji Rice Agrotec, Shrinath Paddy Process and Hanuman Food Products were involved in bogus billing. Accordingly, the A.O concluded that the purchase to the extent of Rs.9,41,05,000/- were not satisfactorily verifiable and 3 Subhash Murarka Vs. ITO, Ward-1(1), Raipur (C.G.)
25% of the total purchases i.e. Rs.2,35,26,250/- was disallowed on an estimated basis and added to the returned income of the assessee. The Ld. CIT(Appeals)/NFAC had upheld the addition made by the A.O and dismissed the appeal.
The Ld. Sr. DR submitted that the issue involved in the present appeal is no more “Res-Integra” for the fact that it involves the issue of rice miller and bogus purchases which are sub-judice before the Hon’ble Jurisdictional High Court. She had submitted a list of the cases which are pending before the Hon’ble High Court as follows:- “1. Keshari Rice Industries (ITA No. 410/RPR/2024 dt. 23.12.2024) for the Asstt. Year 2016-17. 2. Kishore Kumar Panjwani (378/RPR/2024 dt. 08.10.2024) for the Asstt. Year 2014-15. 3. Arvind Kumar Agrawal-(51/RPR/2025 dt. 18.03.2025) for the Asstt. Year 2015-16. 4. Sandeep Agrawal-MA. No. 22/RPR/2019 dated 28.05.2024 (Arising out of for the Asstt. Year 2010-11.
5. Sudhir Kumar Bansal (Filed recently Limitation 11.12.2025) 6. Gurunanak Rice Industries - (ITA 370/RPR/2024 dt. 02.09.2024) for the Asstt. Year 2015-16.”
5. That on similar parameter, the ITAT, SMC Bench, Raipur in the case of Vinod Kumar Agrawal Vs. ITO, Raipur, A.Y.2016-17, dated 11.12.2025 has held and observed as follows:
“2. Parties herein submitted that the issue pertains to the fact that the assessee herein is a rice miller and that as alleged by the 4 Subhash Murarka Vs. ITO, Ward-1(1), Raipur (C.G.)
Department he had obtained the benefit of bogus purchase bills from various agents and hence, the bogus purchase amount @ Rs.25% was added to the total income of the assessee. In this regard, Ld. Sr. DR submitted that this this issue of obtaining benefits through bogus purchase bills by rice millers is sub- judice before the Hon’ble Jurisdictional High Court vide various cases filed before the said forum. She had submitted a list of the cases which are as follows: “1. Keshari Rice Industries (ITA No. 410/RPR/2024 dt. 23.12.2024) for the Asstt. Year 2016-17.
Kishore Kumar Panjwani (378/RPR/2024 dt. 08.10.2024) for the Asstt. Year 2014-15.
3. Arvind Kumar Agrawal-(51/RPR/2025 dt. 18.03.2025) for the Asstt. Year 2015-16.
4. Sandeep Agrawal-MA. No. 22/RPR/2019 dated 28.05.2024 (Arising out of for the Asstt. Year 2010-11.
Sudhir Kumar Bansal (Filed recently Limitation 11.12.2025) 6. Gurunanak Rice Industries - (ITA 370/RPR/2024 dt. 02.09.2024) for the Asstt. Year 2015-16.”
3. In this scenario, it would not be appropriate for this Bench to determine the facts and circumstances pertaining to the said additions on issue of procurement of bogus purchase bills by the assessee. At the same time, it would also not serve any logical purpose by keeping the matter pending at this level and therefore, it would be most appropriate that the said matter be remanded back to the file of the CIT(A)/NFAC and that the first appellate authority shall wait for the decision of the Hon’ble Jurisdictional High Court in the aforestated matters on the issue stated herein, and thereafter shall adjudicate denovo as per law while complying with the principles of natural justice.
4. That even without going into the merits of the matter on consideration of facts that the effective issue in this matter is already subjudice before the Hon’ble Jurisdictional High Court, the same is therefore, restored to the file of the CIT(A)/NFAC, as per the aforestated directions. The order of CIT(A)/NFAC is set-aside accordingly.
5. Before parting, it is made clear that this remanding of the matter to the file of the CIT(A)/NFAC shall not alter/amend any factual scenario pertaining to the case of the assessee. The facts and 5 Subhash Murarka Vs. ITO, Ward-1(1), Raipur (C.G.)
circumstances of the case and the point of law has to be decided afresh only after the decision by the Hon’ble Jurisdictional High Court as per its order, which shall be the main guideline while deciding this case by the first appellate authority. 6. As per the above terms, the grounds of appeal by the assessee stands allowed for statistical purposes.
8. In the result, the appeal of the assessee is allowed for statistical purposes.”
Respectfully following the aforesaid judicial pronouncement, on same parity of reasoning and while maintaining rule of consistency as per similar terms, we set aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file with similar direction as recorded in (supra).
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 6th March, 2026.