Pushpa Saluja Vs ITO (Delhi High Court)
The Delhi High Court has set aside an order passed by the Income Tax Appellate Tribunal (ITAT) in the case of Pushpa Saluja, an assessee, and has remanded the matter back to the ITAT for fresh consideration. The case pertains to Assessment Year (AY) 2014-15 and involves a significant addition made by the Assessing Officer (AO) to the assessee’s income on account of alleged bogus purchases.
Background of the Case:
Pushpa Saluja, the assessee, filed her return of income for AY 2014-15 on November 3, 2014, declaring an income of ₹15,75,420. Her return was selected for scrutiny, leading to the issuance of notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961. The assessment proceedings culminated in an assessment order dated December 28, 2016.
In this assessment order, the AO assessed the assessee’s total income at ₹71,29,800. This substantial increase was primarily due to an addition of ₹55,54,382, which the AO concluded was on account of “bogus purchases.” The AO identified four sundry creditors with outstanding balances that were deemed bogus:
- Ambey Fabric: ₹3,99,750
- Dawar Exclusive: ₹2,17,706
- Meenu Fashions: ₹29,56,358
- Unique Creations: ₹19,80,563
The AO’s findings were based on several observations:
- Summons issued under Section 131 of the Act to these sundry creditors, requesting confirmation of outstanding balances, went unheeded.
- Summons issued to M/s Ambey Fabric and M/s Dawar Exclusive were returned with remarks such as “No such person / No such address / Incomplete Address.”
- Ritesh Kukreja, proprietor of M/s Dawar Exclusive, reportedly denied any business transactions with the assessee.
- The proprietors of M/s Ambey Fabric, M/s Meenu Fashions, and M/s Unique Creations expressed inability to attend proceedings prior to a specific date.
Based on these grounds, the AO added the entire amount reflected against these creditors as bogus purchases to the assessee’s income.
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