Jagdishkumar Madanlal Gupta Vs DCIT (ITAT Mumbai)
The ITAT Mumbai disposed of cross appeals filed by the assessee and the Revenue against the order of the CIT(A) for Assessment Year 2023-24. The assessee challenged the addition relating to alleged bogus purchases under Section 37(1), while the Revenue challenged the restriction of the bogus purchase addition and the deletion of the protective addition relating to gold bullion seized during search.
Regarding the bogus purchases, the Tribunal noted that the assessee had produced invoices, e-way bills, ledger accounts and bank statements to support purchases from Jineshwer Enterprises. The Assessing Officer had not identified any defect in these documents. The Tribunal also observed that, in the assessee’s group case, Jineshwer Enterprises had already been held to be a genuine party. It further held that additions on an estimated basis could not be made without rejecting the books of account and found no corroborative evidence to establish that the purchases were bogus. Accordingly, it directed deletion of the entire addition, including the addition sustained by the CIT(A).
On the Revenue’s challenge to the deletion of the protective addition of ₹8,28,39,000 relating to gold bullion, the Tribunal noted that substantive additions had already been made in the hands of M/s J Kumar Infrastructure Project Limited, which had admitted ownership of the gold. The CIT(A) had examined the issue in detail and found that the seized gold was recorded in the books of account under the head “Plant & Machinery,” supported by purchase bills and payments made through banking channels. The suppliers had confirmed the sales and stated that mentioning gold bar numbers in invoices was not the market practice.
