Case Law Details
Vinod Kumar Agrawal Vs ITO (ITAT Raipur)
The Income Tax Appellate Tribunal, Raipur in Vinod Kumar Agrawal Vs ITO dealt with additions made on alleged bogus purchases in the case of a rice miller for the assessment year 2011–12. The assessee had reported purchases of ₹3.04 crore, out of which purchases worth ₹2.91 crore were flagged by the department based on information from the Commercial Tax Department indicating non-payment of VAT. The Assessing Officer (AO) noted absence of supporting documents such as weighbridge slips, transport bills, and delivery challans, and also found that suppliers were untraceable. Accordingly, 25% of such purchases amounting to ₹72.78 lakh was added as income.
On appeal, the CIT(A) reduced the addition by applying a profit rate of 4.95%, sustaining ₹14.41 lakh and granting relief for the balance. Both the assessee and the Revenue challenged this order. During the proceedings, it was observed that similar issues relating to bogus purchase bills in rice mill cases were already pending before the jurisdictional High Court. The Tribunal noted that in earlier similar cases, matters had been remanded to the CIT(A) with directions to await the outcome of the High Court proceedings.
Considering judicial consistency and submissions from both parties, the Tribunal held that it would not be appropriate to decide the issue at this stage. It set aside the order of the CIT(A) and remanded the matter back for fresh adjudication after the High Court decision. The Tribunal clarified that the appellate authority must decide the matter afresh in accordance with law and principles of natural justice after the High Court ruling. Both appeals and the cross-objection were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The captioned appeals preferred by the assessee and Revenue a/w. corresponding cross objection preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 10.06.2025 for the assessment year 2011-12 as per the grounds of appeal on record.
2. The brief facts in this case are that the assessee during the relevant year had derived income from manufacturing and selling of rice and its bye-products and also trading in Iron and steel. The assessee had made total purchases of Rs.3,04,37,707/- from outside state and from local parties, out of which, regarding goods purchases at Rs.2,91,15,047/-, the Income Tax Department got information from Commercial Tax Department that no VAT was paid to the government account. That as per records, the assessee had only provided the purchase bills but had not furnished to the Department weigh bridge slips, bills of transport, delivery challan which are essential to establish genuineness. That further, the Commercial Tax Department had stated that for the said amount of Rs.2,91,15,047/-, no VAT has been paid to the government account which further goes on to prove bogus purchases made by the assessee. Records also states that the A.O issued notices u/s. 133(6) of the Act to the suppliers to confirm the transactions, however, the suppliers were not found at the given addresses and letters issued were returned back. That even Inspector was deputed to enquire at the given addresses of the supplier and as per the Inspector Report, no such firms were found available at the given address. The A.O had added 25% of such bogus purchases amounting to Rs.72,78,761/-.
3. When the matter went before the First Appellate Authority, the Ld. CIT(Appeals)/NFAC had applied profit rate @4.95% on the impugned purchases of Rs.2,91,15,047/- which works out to Rs.14,41,195/- and the balance additions had been deleted.
4. The Revenue is in appeal against the relief provided to the assessee whereas, the assesse had filed appeal against the sustained addition by the Ld. CIT(Appeals)/NFAC a/w. cross objection challenging the addition to the extent.
5. In this background, it was also observed by the Bench at the time of hearing that the assessee is rice miller and the issue of bogus purchases is covered within the aspect of state wide survey conducted by the Department and other enforcement agencies cracking the bogus purchases made by the rice millers. This very issue is sub-judice before the Hon’ble Jurisdictional High Court. In that respect, in earlier occasion this Bench had remanded the matter back to the file of the Ld. CIT(Appeals)/NFAC with a direction to the Ld. CIT(Appeals)/NFAC to wait till the disposal of the issue by the Hon’ble Jurisdictional High Court and accordingly, pass necessary orders. However, those were the cases where the appeal pertained to the assessee only. However, in this case so far the assessee is concerned, addition from 25% has been reduced by the Ld. CIT(Appeals)/NFAC and out of total addition made by the A.O at Rs.72,78,761/-, the addition was restricted to Rs.14,41,195/-, therefore, the assessee had already got relief to Rs.58,37,566/- [Rs.72,78,761/- (-) Rs.14,41,195/-]. However, the Ld. Counsel for the assessee had made a statement at Bar at the time of hearing that since the issue is sub-judice before the Hon’ble Jurisdictional High Court, the assessee does not have any problem if the matter is remanded to the file of the Ld. CIT(Appeals)/NFAC following the earlier order of this Bench. The Ld. Sr. DR also conceded regarding the same for Revenue’s appeal as well on the same parameters on ground of judicial consistency.
6. We find that the ITAT, Division Bench, Raipur in the case of Shankar Rice Mill Vs ITO, Mahasamund, ITA No.628/RPR/2025, dated 09.02.2026 on the similar issue had held and observed as follows:
“2. Brief facts in this case are that the assessee is a partnership firm, has filed its return of income for A.Y. 201415 on 09.10.2014 declaring total income at Rs.53,290/-. The A.O has received an information from DDIT/ADIT (Inv.)-Raipur-1 that the assessee had indulged into fictitious purchases from entity M/s.Shri Shyam Trading to the tune of Rs.66,50,000/-. Based on the above-mentioned information, the case was reopened u/s 147 of the Act, 1961 (for short ‘the Act’) and a notice u/s 148 of the Act was issued to the assessee on 28.04.2021. It was seen that M/s. Shri Shyam Trading was a proprietary concern of Shri Shyam Sunder Namdeo, was found to be a bogus concern. The assessee made bogus purchases of Rs.66,50,000/- from bogus concern M/s.Shri Shyam Trading. It was observed by the A.O that the PAN of assessee was present in list of beneficiaries, provided by Investigation wing. The A.O has issued statuary notices, in response the assessee reiterated that the assessee firm had not purchased any bogus bills. In the absence of documentary evidence, a sum of Rs.66,50,000/- was assessed as Unexplained expenditure u/s. 69C of the Act and added to the income of the assessee. The A.O completed the assessment u/s.143(3) read with section 147 of the Act at Rs.67,03,285/-.
3. In this regard, the Ld. Sr. DR submitted that 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.
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 ITA No. 16/RPR/2016) 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.”
4. That on similar parameter, the ITAT, SMC Bench, Raipur in the case of Vinod Kumar Agrawal Vs. ITO, Raipur, ITA No.630/RPR/2025, 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 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.
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 ITA No. 16/RPR/2016) 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.”
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 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.”
5. 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 ITA No.630/RPR/2025 (supra).
6. In the result, appeal of the assessee is allowed for statistical purposes.”
7. 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 matters back to its file with similar direction as recorded in ITA No.628/RPR/2025 (supra).
8. That as per above terms, both the appeals of the assessee and Revenue as well as cross objection of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 20th April, 2026.
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