ITO Vs Pradeep Kumar Agarwal (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, delivered a judgment in the case of ITO Vs Pradeep Kumar Agarwal concerning the disallowance of substantial purchases made by the assessee, Pradeep Kumar Agarwal, a proprietor of M/s Shiv Enterprises, engaged in the trading of mustard oil cake and groundnut oil cake. The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi, which had deleted a disallowance of Rs. 9,60,01,182/− treated as unexplained expenditure by the Assessing Officer (AO).
Factual Background
Pradeep Kumar Agarwal, the assessee, filed a return of income for the Assessment Year 2021-22. During the assessment, the AO noted that the assessee made significant purchases totaling Rs. 9,60,01,182/− from three suppliers: Shri Parshottam Agarwal (M/s Jagdamba Traders), Jagdamba Enterprises, and Smt. Parwati Agarwal (M/s Parwati Cottex and Oil Industries). The AO observed that these suppliers had not filed Income Tax Returns (ITR) for the relevant year and did not respond to a notice issued under Section 133(6) of the Income Tax Act, 1961 (the Act).
Based on various defects alleged in the supporting documents—such as incomplete addresses on transport vouchers and invoices, similarity in the layout and handwriting of transport vouchers, use of the same vehicle number by multiple transporters, and alleged non-existence of some vehicles—the AO concluded that the bills and vouchers were non-genuine. Consequently, the entire amount of Rs. 9,60,01,182/− was disallowed and added back to the assessee’s income as unexplained expenditure.
