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G. S. KULKARNI, SOMASEKHAR SUNDARESAN
Ashok Kumar Rungta – Appellant
Versus
Income Tax Officer 24(1)(1) – Respondent
JUDGMENT :
Somasekhar Sundaresan, J.
1. This batch of Appeals challenge an Order and Judgment of the Income Tax Appellate Tribunal (“ITAT”) dated August 9, 2017 (“Impugned Order”) upholding an Order dated April 27, 2015 passed by the Commissioner of Income Tax - Appeal (“CIT-A”), disallowing 10% of certain suspect purchases on the premise that they are bogus purchases. Originally, the Assessing Officer had passed an order dated March 21, 2014 (“AO Order”) on reassessment of returns for three Assessment Years, disallowing all the expenses incurred towards purchase from certain entities, and thereby adding such expenses to the income of the Appellant-Assessee.
2. Income Tax Appeal No.1753 of 2018 relates to Assessment Year 2009-10; Income Tax Appeal No.2780 of 2018 relates to Assessment Year 2010-11; and Income Tax Appeal No.1759 of 2018 relates to Assessment Year 2011-12.
3. The questions of law raised by the Appellant-Assessee are manifold. Mr. N.M. Porwal, Learned Counsel appearing on behalf of the Appellant-Assessee submitted that he would only be pressing four out of the seven questions raised in these Appeals. However, at the heart of these questions, lies a single issue, namely, w
The Revenue must provide cogent evidence to substantiate claims of bogus purchases; arbitrary disallowance without proper analysis is impermissible.
The court ruled that when purchases are deemed bogus, the entire amount should be disallowed, rejecting the Tribunal's speculative estimation of profit margin.
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