Murtuza Abdul Gaffar Khan Vs National Faceless Appeal Centre (ITAT Mumbai)
In the case of Murtuza Abdul Gaffar Khan vs. National Faceless Appeal Centre (ITAT Mumbai), the appellant, Murtuza Abdul Gaffar Khan, challenged the appellate order passed by the National Faceless Appeal Centre, Delhi, concerning the assessment order for the assessment year 2011-12. The appellant contested the addition of ₹1,15,86,557/- as non-genuine purchases under Section 68 of the Income Tax Act, 1961.
The facts of the case revealed that the appellant was an individual proprietor of Engineer Tube Traders engaged in the business of reselling MS Pipes, Tubes, and allied products. The notice under Section 148 of the Act was issued after recording reasons, and subsequently, the assessment was reopened. The assessing officer found that the appellant had made purchases from two parties flagged as hawala parties by the Maharashtra sales tax department and DGIT, Mumbai. Despite attempts to serve notices under Section 133(6) of the Act to these parties, they could not be located.
In the assessment proceedings, the assessing officer added 100% of the disputed purchases to the appellant’s income. Upon appeal, the Commissioner of Income Tax (Appeals) upheld the addition. However, before the Income Tax Appellate Tribunal (ITAT), the appellant presented evidence such as stock registers, purchase and sales details, and gross profit charts to demonstrate that the alleged bogus purchases had resulted in genuine sales. The appellant relied on the decision of the Bombay High Court in the case of PCIT vs. Mohd. Haji Adam and Co. to support their argument.
