Gaurav Singhi Vs ITO (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, adjudicated cross appeals filed by the assessee and the Revenue against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2021–22.
The assessee, engaged in trading of scrap, had maintained audited books of accounts along with day-to-day stock records. During assessment, the Assessing Officer observed that certain suppliers either denied transactions or failed to respond to notices issued under Section 133(6), leading to doubts regarding the genuineness of purchases. The Assessing Officer disallowed purchases from two parties entirely and partially disallowed purchases from other parties, resulting in a total addition of ₹6.67 crore.
On appeal, the CIT(A) held that entire purchases could not be treated as bogus but concluded that the transactions were not fully verifiable. Accordingly, the CIT(A) estimated profit embedded in such purchases at 12.5% and sustained an addition of ₹1.32 crore.
Before the Tribunal, the assessee submitted that purchases were supported by invoices, e-way bills, transport documents, GST records, and payments through banking channels. It was also argued that stock records were maintained and sales had not been disputed by the Revenue. The assessee further contended that the suppliers had valid GST registrations at the time of transactions and that details of purchases were reflected in GSTR-2A, indicating that suppliers had reported sales.
