Karan Israni Vs DCIT (ITAT Delhi)
ITAT Delhi dismissed the assessee’s appeal for AY 2019-20, upholding the 153C assessment and addition of ₹7.16 crore on account of bogus purchases / accommodation entries. The case arose from a search u/s 132 in Sanjay Jain / Mehta Group, where Tally data (Annexure A-31) showing cash commission and bogus billing was seized, directly implicating the assessee.
On jurisdiction, the Tribunal rejected the plea of delayed satisfaction note, holding that recording satisfaction within eight months of completion of searched person’s assessment was reasonable and permissible, relying on Calcutta Knitwears (SC). The satisfaction note clearly established nexus between seized material and the assessee, satisfying s.153C requirements.
The argument of violation of natural justice & denial of cross-examination was also rejected. The Tribunal held that cross-examination is not an absolute right and, in the present case, the addition was not based solely on statements but also on seized digital evidence, ledger accounts and corroborative material.
On merits, the Tribunal upheld 100% addition of bogus purchases, noting complete absence of:
– stock registers,
– transport / delivery evidence,
– gate passes or site-wise consumption records, and
– reconciliation of purchases with actual material usage.
Mere GST payment or banking transactions was held insufficient to prove genuineness. Relying on NK Proteins (SC), the Tribunal held that once purchases are found bogus, no estimation or partial relief (like 25%) is warranted.
The challenge to 153D approval was also rejected. The Tribunal held that the assessee failed to show that approval by the Addl. CIT was mechanical; the statute does not mandate any specific format or elaborate reasoning.
Result:
– 153C proceedings upheld
– Addition of ₹7.15 crore on bogus purchases confirmed in full
– 153D approval held valid
– Assessee’s appeal dismissed entirely
FULL TEXT OF THE ORDER OF ITAT DELHI
