Virendra Kumar Jain Vs ITO (ITAT Agra)
The appeal before the Income Tax Appellate Tribunal (ITAT), Agra Bench, was filed by the assessee, Virendra Kumar Jain, a wholesale trader of food grains, pulses, and oilseeds, against an ex parte order passed by the National Faceless Appeal Centre (NFAC)/Commissioner of Income-tax (Appeals) [CIT(A)] for the Assessment Year (A.Y.) 2018-19. The core of the matter was an addition of ₹ 1,18,52,322/- made by the Assessing Officer (AO) for bogus sales.
Origin of the Addition and Assessment Proceedings
The assessee filed a return declaring an income of . Subsequent reassessment proceedings were initiated under Section 147 based on information regarding substantial cash transactions. While the assessee’s initial explanations for cash deposits and withdrawals were accepted by the AO, further scrutiny revealed information alleging that the assessee had shown bogus sales of to a New Delhi entity, M/s. Mahaveer Prasad Suresh Kumar.
The assessee submitted supporting documentation, including purchase orders, ledger extracts, invoices, delivery challans, mandi gate passes, and lorry receipts, to substantiate the sales. However, the AO noted discrepancies in the supporting documents, such as variations in invoice dates and lorry numbers, and relied on information from the department’s investigation wing. The investigation wing indicated that M/s. Mahaveer Prasad Suresh Kumar was a non-genuine entity, essentially a shell company involved in providing accommodation entries, and that the assessee was listed as a beneficiary.
