2022 (5) TMI 361 - AT - Income Tax

Bogus purchases/ transactions - accommodation entries - HELD THAT - As perused the material available on record and gone through the orders of the authorities below. I find that the AO had made verification regarding genuineness of the transaction and reiterated the finding that the transactions were not genuine and have been executed merely for accommodation entries. The assessee has not brought any material to rebut the finding of the Assessing Officer. Hence, we do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby dismissed. Grounds raised by the assessee in this appeal are therefore, dismissed.

Summary

Issues:
Appeal against assessment order for AY 2016-17 - Addition on account of bogus purchases and commission expenses - Violation of natural justice in making additions based on collected material without opportunity for rebuttal - Charging of interest under sections 234A, 234B, and 234C.

Analysis:
The appeal was filed against the assessment order for the assessment year 2016-17, challenging the addition made by the Assessing Officer (AO) on account of bogus purchases and commission expenses. The appellant contended that the order passed by the AO and upheld by the Commissioner of Income Tax (Appeals) was bad in law and on facts. The appellant disputed the addition of Rs. 18,65,080 on account of bogus purchases and Rs. 74,603 as commission expenses, arguing that the additions were made without direct evidence and solely based on presumption and assumptions. The appellant claimed to have provided all necessary evidence to establish the genuineness of the transactions, citing the decision of the Hon'ble Supreme Court in a similar case. However, the authorities found the transactions to be sham and not genuine, leading to the dismissal of the appeal.

The appellant further argued that the additions were made without providing an opportunity to rebut the collected material, violating the principles of natural justice. Additionally, the appellant challenged the charging of interest under sections 234A, 234B, and 234C of the Act. Despite the appellant's contentions, the authorities upheld the additions and dismissed the appeal. The Tribunal, after considering the submissions and evidence on record, found no reason to interfere with the findings of the lower authorities. The Tribunal concurred with the AO's verification of the transactions as not genuine and executed for accommodation entries. As a result, the appeal was dismissed, affirming the addition made by the AO and the decision of the Commissioner of Income Tax (Appeals).

In conclusion, the Tribunal upheld the assessment order for the assessment year 2016-17, rejecting the appellant's arguments regarding the additions made on account of bogus purchases and commission expenses. The Tribunal found no merit in the appellant's contentions and dismissed the appeal, affirming the decision of the lower authorities. The Tribunal also addressed the issue of natural justice violation in making additions based on collected material without providing an opportunity for rebuttal and upheld the charging of interest under sections 234A, 234B, and 234C of the Act.