DEEPAK KUMAR AGARWAL,HATHRAS vs. I.T.O WARD 4(3)(4), HATHRAS
Facts
The assessee, engaged in the wholesale metal business, declared an income of Rs. 12,91,100. During scrutiny, the AO found that two parties from whom the assessee made purchases did not file their returns, and notices to them were unresponded. The AO treated purchases totaling Rs. 2,56,52,304 as bogus and added them to the assessee's income.
Held
The tribunal set aside the CIT(A)'s order regarding the sustained addition of Rs. 6,77,876 for purchases from M/s. C.K. Industries. It directed the Assessing Officer to re-examine all documentary evidence provided by the assessee to prove the genuineness of these purchases, emphasizing that mere absence of confirmation is insufficient without considering other supporting evidence.
Key Issues
The key legal issue is the genuineness of purchases from M/s. C.K. Industries, specifically whether the absence of supplier confirmation alone is sufficient to deem purchases bogus, or if other documentary evidence must be considered.
Sections Cited
Section 143(2), Section 142(1), Section 133(6), Section 143(3), Section 144B, Section 250, Section 44AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 492/Agr/2025 Assessment Year: 2020-21
Deepak Kumar Agarwal, C/o Vs. Income-tax Officer, Heera Lal, Manish Kumar, Kamla Ward 4(3)(4), Hathras. Bazar, Hathras. PAN : AAJPA1930C (Appellant) (Respondent)
Assessee by Sh. Pankaj Gargh, Advocate Department by Sh. Shailendra Srivastava, Sr. DR
Date of hearing 17.12.2025 Date of pronouncement 17.12.2025
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 20.08.2025, passed in Appeal No. NFAC/2019-20/10193492
by the learned Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2020-21, wherein learned CIT(Appeals) has allowed
assessee’s appeal in part. 2. Brief facts state that the appellant assessee is engaged in whole sale business of metal and metal ores in the name and style of HeeraLal Manish
ITA No.492/Agr/2025
Kumar. Assessee filed his return of income on 03.01.2022, declaring
income of Rs.12,91,100/-. The case was selected for scrutiny to verify high
liabilities shown in balance sheet as compared to low income/receipts
declared in ITR and to verify genuineness of purchases made from high
risk billers. Statutory notices u/s. 143(2) and 142(1) of the Act were issued
and served upon the assessee. Assessee furnished requisite details as
called for by the Assessing Officer. The Assessing Officer noticed on
perusal of list of purchases that the two parties from whom the assessee
made purchases, namely R.G. Enterprises (Prop. Laxmi Kant Ram Gopal
Bhuraria) and M/s. C.K. Industries (Prop. Shri Simapreet Arora) did not file
their return of income for the year under consideration and the notices sent
to them u/s. 133(6) of the Act to furnish confirmation of sales to the
appellant assessee, were not responded. As per Assessing Officer, the
acknowledgement of return of income filed with respect to M/s. R.G.
Enterprises was found to be forged either by assessee or proprietor of M/s.
R.G. Enterprises. Hence, the Assessing Officer was of the view that since
both the parties did not file their return of income, the purchases of
Rs.2,49,74,428/- shown by assessee from Laxmi Kant Ram Gopal Bhuraria
(R.G. Enterprises) and Rs.6,77,876/- from Shri Simapreet Arora (C.K.
Industries), totaling to Rs.2,56,52,304/-, are bogus purchases and added
the same to the income of assessee, assessing total income at 2 | P a g e
ITA No.492/Agr/2025
Rs.2,69,43,404/-, vide assessment order date 26.09.2022 passed u/s.
143(3) r.w.s. 144B of the Act.
Aggrieved, assessee preferred first appeal before the learned CIT(A),
who partly allowed the appeal, inasmuch as, the addition made towards
bogus purchases from M/s. R.G. Enterprises amounting to Rs.2,49,74,428/-
was directed to be deleted after verifying the documentary evidences
furnished by assessee to prove the genuineness of the said purchases.
However, the addition made towards bogus purchases from M/s. C.K.
Industries, amounting to Rs.6,77,876/- was confirmed for want of
confirmation from the said party.
Present appeal has been filed on the ground that the learned CIT(A)
has erred in sustaining the addition of Rs.6,77,876/- made on account of
bogus purchases from M/s. C.K. Industries, without properly considering
the documents to prove the genuineness of purchases.
Perused the records and heard learned representative for assessee
and learned DR for revenue.
Learned AR for assessee has submitted that various documentary
evidences in the form of GST registration, details of GST returns filed by
the seller, copy of purchase invoice, e-way bill, transport bilty, confirmation
from the transporter, copy of audit report u/s. 44AB, copy of bank statement
of HDFC Bank, from where the payment has been made by assessee 3 | P a g e
ITA No.492/Agr/2025
towards the impugned purchases, were submitted before the authorities
below, which were not properly considered before making and confirming
the impugned addition.
Learned DR for revenue has supported the impugned order.
It is observed that the impugned addition of Rs. 6,77,876/- on account
of alleged bogus purchases from M/s. C.K. Industries has been sustained
by the learned CIT(A) mainly for want of genuineness of the transaction
and creditworthiness and confirmation from the said party. The assessee
has contended that it had furnished various documentary evidences to
substantiate the genuineness of the impugned purchases, such as GST
registration, details of the supplier, details of GST returns filed by the seller,
purchase invoices, e-way bills, transport bilty, confirmation from the
transporter, audit report under section 44AB, and bank statement
evidencing payment through banking channels. It appears that these
documentary evidences have not been examined and appreciated in a
proper and holistic manner either at the stage of assessment or at the first
appellate stage. It is a settled position of law that where the assessee
produces prima facie evidences in support of its claim, the same are
required to be duly verified and considered before drawing any adverse
inference. Mere absence of confirmation from the supplier, by itself, may
not be sufficient to sustain the addition without examining the other 4 | P a g e
ITA No.492/Agr/2025
supporting evidences placed on record. In the interest of justice and fair
play, we deem it appropriate to set aside the order of the learned CIT(A) on
this limited issue and restore the matter to the file of the Assessing Officer.
The Assessing Officer is directed to examine and verify all the documentary
evidences furnished by the assessee in support of the purchases from M/s.
C.K. Industries and thereafter pass a fresh order in accordance with law,
after providing reasonable opportunity of hearing to the assessee. The
assessee is also directed to file his submissions along with documentary
evidences before the Assessing Officer in support of his claim. Needless to
say that the Assessing Officer shall ensure observance of the principles of
natural justice. Accordingly, the appeal is liable to be allowed for statistical
purposes.
In the result, appeal is allowed for statistical purposes.
Order pronounced in the open court on 17.12.2025 and reduced
in writing on this 15 day of Janurary, 2026.
Sd/- Sd/- (S. RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15.01.2026 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
5 | P a g e
