Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 1286 - AT - Income TaxIssues: Appeal against assessment order restricting disallowance to 25% of purchases from non-existent vendors. Analysis: The appeal was filed by the Income Tax Officer against the appellate order passed by the National Faceless Appeal Centre (NFAC), Delhi. The assessing officer contested the decision of the CIT-A to limit the disallowance to 25% of purchases instead of 100% from non-existent vendors, citing a Gujarat High Court case and a Supreme Court ruling. The assessee, an individual, filed the return of income for the assessment year 2010-11. The AO received information from the GI (Investigation), Pune, regarding a racket involving hawala dealers issuing bogus invoices. The assessee was found to be a beneficiary of such purchases, leading to the issuance of a notice under section 148 of the Income Tax Act. Despite producing various documents, the assessee failed to provide certain crucial details, resulting in the addition of 100% of the bogus purchases to the total income. The CIT-A, however, followed the Gujarat High Court decision and restricted the addition to 25% of the purchases, leading to the AO's appeal. The departmental representative argued against the reduction of disallowance, referencing the Supreme Court's decision in a similar case. Despite the absence of the assessee during the proceedings, the issue was decided based on the available facts. The Tribunal reviewed the contentions and orders of the lower authorities. It noted that the AO made the full addition despite the assessee providing documentation and conducting transactions through banking channels. The CIT-A's decision to limit the addition to 25% was upheld, citing precedents from the Gujarat High Court and similar cases. The Tribunal found no fault in the CIT-A's order and dismissed the AO's appeal, affirming the restriction of the addition to 25% of the bogus purchases. In conclusion, the Tribunal upheld the CIT-A's decision to restrict the disallowance to 25% of the purchases from non-existent vendors, following legal precedents and finding no merit in the AO's appeal.
|