Manisha Vs ITO (ITAT Delhi)
Section 68 Addition Quashed Due to Lack of Independent Enquiry; Tribunal Quashes Addition Based on Untested Statement Alone; Section 68 Addition Invalid Without Independent Verification: ITAT; GST-Reflected Sales Cannot Be Taxed Again u/s 68 Without Independent Enquiry ITAT Delhi Deletes ₹95 Lakh Addition:
In this appeal, Assessee, a proprietor dealing in PVC pipes & fittings, challenged the addition of ₹95 lakhs made u/s 68. AO alleged that sales made to M/s Radha Buildtech India Pvt Ltd were bogus based on the search findings in the Gaur Sons group & statement of Shri Babloo, Director of Radha Buildtech, who admitted to issuing bogus bills for certain entities.
Before Tribunal, Assessee submitted ledger accounts, tax invoices, e-way bills, bank statements, GST returns (GSTR-1, 3B & 9), all demonstrating genuine sales. It was also shown that similar sales to Radha Buildtech in the preceding year (AY 2021-22) were accepted by the Department. Further, the assessment order of Radha Buildtech for AY 2022-23 listed parties involved in bogus billing, but Assessee’s name was not included.
Tribunal found that AO made no independent enquiry & relied solely on the untested statement of Shri Babloo without offering Assessee cross-examination. Books of account were not rejected & the sales of ₹11 crore (including the disputed ₹95 lakh) were accepted for GST/VAT purposes. Tribunal held that once sales are recorded in books & accepted in indirect tax assessments, there is no basis to treat the same receipts as unexplained u/s 68 without any contrary material. Tribunal deleted the addition in full & allowed the appeal.
