ITO Vs Nitin Dutta (ITAT Amritsar)
Bogus Purchase Addition Restricted to 25% Upheld – Entire Disallowance u/s 69C Rejected – Revenue Appeal Dismissed – ITAT Amritsar
The AO treated purchases of ₹60.45 Cr as bogus and added the entire amount u/s 69C after suppliers failed to respond to notices and supporting documents were alleged to be deficient. CIT(A), however, noted that sales, stock records, GST returns and quantitative details were accepted and therefore entire purchases could not be disallowed; the addition was restricted to 25% to cover possible inflation.
ITAT observed that the assessee maintained audited books, furnished quantitative purchase–sale details and confirmed accounts of suppliers, and the AO himself accepted sales and stock. Since trading activity cannot exist without purchases, full disallowance was unjustified. At the same time, certain deficiencies in evidence warranted estimation. Accordingly, the Tribunal upheld CIT(A)’s order restricting addition to 25% and dismissed the Revenue’s appeal.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
1. Aforesaid appeal by revenue for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC dated 18-06-2024 in the matter of an assessment framed by Ld. AO u/s 143(3) on 21-04-2021. At the time of hearing, none appeared for assessee. The perusal of order sheet entries would establish that none is appearing for assessee since past many occasions. Left with no option, we proceed to dispose-off the appeal after hearing revenue. The Ld. CIT-DR pleaded for full disallowance of alleged bogus purchase as against estimation of 25% as made by Ld. CIT(A) in the impugned order.
