Case Law Details
Sushama Industries Vs ITO (ITAT Kolkata)
Introduction: The Income Tax Appellate Tribunal (ITAT) Kolkata recently addressed the issue of bogus purchases in the case of Sushama Industries vs. ITO for the Assessment Year (AY) 2011-12. The key contention in this case was the addition of Rs. 7,27,536/- by the Assessing Officer (AO) on account of bogus purchases. The ITAT’s decision primarily focuses on whether the entire amount should be added to the income of the assessee or if a more nuanced approach should be adopted.
Detailed Analysis:
1. Background and Assessment: Sushama Industries, engaged in the business of manufacturing electrical goods and aluminum items, was assessed for AY 2011-12. The AO initiated proceedings under Section 147 and issued a notice under Section 148 based on information received from the DDIT (Investigation), Kolkata. The AO alleged that the assessee had made bogus purchases of Rs. 7,27,536/- from seven parties controlled by Sri Sanjiw Kumar Singh, who was involved in providing accommodation entries. The entire purchase amount was added to the assessee’s income.
2. Confirmation by Ld. CIT(A): The Commissioner of Income-tax (Appeals) (CIT(A)) upheld the AO’s order, reasoning that the assessee failed to substantiate the purchases with adequate evidence.
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