Palak Alloys Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Bogus Purchase Allegation Collapses: Unsecured Loans Proven: Section 68 Addition Wiped Out by Tribunal; ITAT Deletes Addition for Alleged Fake Purchases Due to Lack of Contrary Evidence; Unsecured Loan Addition Removed as Revenue Failed to Disprove Supporting Documents; ITAT Sets Aside Additions Based Solely on Third-Party GST Reports; Failure to Identify Defects in Loan Documents Leads to Deletion of Section 68 Addition; Assessment Reopening Followed by Unsupported Additions Reversed by ITAT; ITAT Allows Appeal After Confirming Purchases Used in Manufacturing Process; Loans Treated as Genuine When ITRs and Bank Statements Not Disputed
Assessee’s case was reopened u/s 147 based on Insight Portal info alleging that purchases from Ultra Trade Mart were accommodation entries. AO treated ₹26,07,801 as bogus purchases u/s 69C relying only on GST intelligence reports, ignoring assessee’s evidences such as purchase bills, e-way bills, consignment notes, bank payments & ledger extracts.
Tribunal noted that all documentary evidences were already before AO & CIT(A), and Revenue brought no contrary material except third-party allegations; therefore addition u/s 69C was unsustainable & was directed to be deleted.
Assessee also challenged addition of ₹2,21,00,000 u/s 68 relating to unsecured loans from five parties. Tribunal found that assessee had filed confirmations, ITRs, bank statements & supporting documents before AO & CIT(A). Authorities failed to point out any defect or inconsistency & made the addition merely alleging lack of creditworthiness. Tribunal relied on Calcutta HC decision in Sreeleathers (448 ITR 332) & held that when evidences are on record & remain uncontroverted, addition u/s 68 cannot stand. Accordingly, the addition was deleted.
