ITO Vs Tufail Ahmed Bakhshullah Siddiqui (ITAT Mumbai)
Steel Purchases Doubtful, Sales Accepted: ITAT Cuts Addition to 6% and Rejects Revenue’s Demand for Full Disallowance
Summary: The dispute concerned ₹35,41,340 of steel purchases from a supplier whose existence and transactions were questioned. The Assessing Officer added the full purchase amount under section 69C; the Commissioner (Appeals) restricted the addition to 12%; and the Tribunal finally fixed it at 6%, or ₹2,12,480.
How the Dispute Began
The assessee carried on a steel trading business as proprietor of Hindustan Steels. He filed his return for Assessment Year 2019–20 declaring income of ₹16,59,190.
The Department received information alleging that purchases of ₹35,41,340 from Moksh Alloy Pvt. Ltd. were supported by accommodation bills rather than actual supplies. The Assessing Officer issued a notice under section 148A(b), passed an order under section 148A(d) and issued a reassessment notice under section 148, all culminating in proceedings initiated on 31 March 2023.
During reassessment, the assessee produced purchase invoices and e-way bills, along with other records. The officer remained unconvinced. Moksh Alloy did not respond to a notice under section 133(6), and verification at its stated address found another entity occupying the premises. Treating the entire purchase as unexplained expenditure, the officer added ₹35,41,340 under section 69C and applied section 115BBE.
