Jatinder Gupta Vs DCIT (ITAT Amritsar)
Third-Party Statement Alone Without Cross-Examination Insufficient to Support Bogus Purchase Claim
The Income Tax Appellate Tribunal (ITAT) Amritsar heard cross-appeals arising out of an order of the Commissioner of Income Tax (Appeals) (CIT(A)), National Faceless Appeal Centre, Delhi, dated 25th June 2024, concerning the Assessment Year (AY) 2014-15. The appeals followed the assessment framed by the Assessing Officer (AO) under Sections 147 read with 144B of the Income-tax Act, 1961, on 30th May 2023. The central issue was the addition of Rs. 316.58 lakhs by the AO on account of alleged bogus purchases. The assessee, Jatinder Gupta, engaged in trading of molasses through his proprietorship, M/s Mahajan Molasses Co., filed his return of income at Rs. 23.46 lakhs, which was initially subjected to scrutiny under Section 143(3) on 16th December 2016.
The case was reopened pursuant to information received from ITO-4(3), Abohar, assessing another entity, M/s Modern Sales Corporation, alleging that the assessee made bogus purchases of Naku/Rice Bran from this entity for Rs. 316.58 lakhs. Notices under Section 148 and subsequently Section 142(1) were issued, requiring the assessee to substantiate these purchases. The AO relied primarily on the statement of Shri Avinash Chander, proprietor of M/s Modern Sales Corporation, recorded under Section 131 on 26th December 2016, wherein he purportedly admitted to providing entries of bogus sales and purchases to various parties, including the assessee. On this basis, the AO added Rs. 316.58 lakhs to the assessee’s income.
