2023 (7) TMI 337 - AT - Income Tax

Assessment u/s 153A - Bogus purchases - Whether incriminating documents found in search? - addition being 15% of the total bogus purchase - HELD THAT - As in the absence of any incriminating material and by placing reliance on the decision of Continental Warehousing Corporation (NHAVA SHEVA) Ltd. 2015 (5) TMI 656 - BOMBAY HIGH COURT , Murli Agro Products Ltd. 2010 (10) TMI 1052 - BOMBAY HIGH COURT and All Cargo Global Logistics 2015 (5) TMI 656 - BOMBAY HIGH COURT we delete the impugned addition made by the A.O. and confirmed by the ld. CIT(A) and also restricted to 12.5% on bogus purchases by the Tribunal order. Hence, we allow the additional ground of appeal raised by the assessee.

Summary

Issues:
The judgment involves challenges against the order of the Commissioner of Income Tax (Appeals) under section 144 read with section 153A of the Income Tax Act, 1961 for the Assessment Year 2007-08. The main issue is the addition made by the Assessing Officer based on alleged bogus purchases from a specific entity, without any incriminating material found during the search.

Assessment Year 2007-08:
The appellant challenged the assessment order passed under section 144 of the Act, arguing that no incriminating material was found during the search, making the assessment unwarranted. The Tribunal admitted the additional ground raised by the appellant, emphasizing the importance of this issue to the appeal.

Unabated Assessment and Incriminating Material:
The Tribunal noted that the impugned assessment year was unabated, and the Revenue failed to prove the existence of incriminating seized material in the appellant's case. Citing previous decisions and the absence of such material, the Tribunal allowed the ground of appeal raised by the appellant, leading to the deletion of the impugned addition.

Omission in Hearing:
An inadvertent error resulted in the appeal for the Assessment Year 2007-08 not being heard initially. However, upon being brought to attention, the present appeal was heard before the Tribunal.

Decision and Rationale:
The Tribunal, after considering the submissions and relevant case law, deleted the impugned addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals). Relying on previous decisions and the absence of incriminating material, the Tribunal allowed the additional ground of appeal raised by the appellant, rendering the other grounds of appeal academic. Consequently, the appeal filed by the appellant was allowed.

Conclusion:
The Tribunal's decision in this judgment primarily focused on the absence of incriminating material during the search and the implications for the assessment made by the Revenue. By considering legal precedents and the specific circumstances of the case, the Tribunal ruled in favor of the appellant, leading to the deletion of the impugned addition and the allowance of the appeal.