| आयकर अपील(cid:547)य अ(cid:876)धकरण (cid:219)यायपीठ, मुंबई |

| आयकर अपीलीय अिधकरण (cid:586)ायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER &

SHRI SUNIL KUMAR SINGH, HON’BLE JUDICIAL MEMBER I.T.A. No. 1252/Mum/2024 Assessment Year: 2010-11

Golden Hardware, Shop No. 09, Venus Tower, Three Petrol Pump, L.B. S. Marg, Thane West, Mumbai [PAN: AAEFG7001P]

V s

Income Tax Officer, Ward-1(4), Mumbai 1

अपीलाथ(cid:568)/ (Appellant) (cid:292)(cid:215) यथ(cid:568)/ (Respondent)

Assessee by : Shri Rohan Despande Revenue by : Shri R. r. Makwana, Sr. DR सुनवाई क(cid:551) तार(cid:547)ख/Date of Hearing : 02/09/2024 घोषणा क(cid:551) तार(cid:547)ख /Date of Pronouncement: 02/09/2024 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM:

This appeal by the assessee is preferred against the order of ld.

Commissioner of Income Tax (Appeal), Varanashi, dt. 21.11.2023 pertaining to Assessment Year 2010-11.

2. The grievance of the assessee reads as under:-

“1. On the facts and in the circumstances of the case and in law, the Ld. Jt. CIT (A), National Faceless Appeal Centre erred in upholding the disallowance of Rs. 7,43,974/- (representing over 10% of the total purchases made by the Appellant during the AY) as alleged 'bogus purchases' purportedly made by the Appellant.

2. On the facts and in the circumstances of the case and in law, the Ld. Jt. CIT (A), National Faceless Appeal Centre failed to appreciate that the Ld. AO had neither rejected the Appellant's books of accounts, nor doubted and/or impugned the sales effected by the Appellant, thereby leading to the logical conclusion that without corresponding purchases being made, the Appellant could not have effected the sales in question. Reliance for the same is inter alia placed upon CIT v. Nikunj Eximp Enterprises (P.) Ltd., [2015] 372 ITR 619 (Bom), Geolife Organics v. ACIT (ITA No. 3699/Mum/2016, decided on May

05, 2017) and ACIT v. Mahesh K. Shah (ITA No.

3. On the facts and in the circumstances of the case and in law, the Jt. CIT (A), National Faceless Appeal Centre did not appreciate that while making the disallowance on account of 'bogus purchases', the Ld. AO had not undertaken any efforts to verify the genuineness of the purchases, but had merely relied upon the information received from the Sales Tax Department. It is well settled that the Ld. AO cannot sit back and make additions by simply relying upon the information obtained from the Sales Tax Department, as held inter alia in Geolife Organics v. ACIT (supra), and therefore, the Ld. Jt. CIT(A) erred in not allowing the Appellant's appeal.

4. In any event, on the facts and in the circumstances of the case and in law, the Jt. CIT (A), National Faceless Appeal Centre ought not to have made any disallowance since the Appellant had never been confronted with any statement(s) given by the alleged 'hawala dealers', nor had the Appellant been given any opportunity by the Ld. AO to cross-examine the alleged 'hawala dealers' in question. In this regard, it is well settled that no addition can be sustained against an assessee in absence of adherence to the principles of natural justice.

5. On the facts and in the circumstances of the case and in law, the Ld. Jt. CIT (A), National Faceless Appeal Centre failed to appreciate that once payments in relation to purchases had been made by the Appellant to the sellers through normal banking channels and by way of account payee cheques, in absence of any evidence brought on record by the Ld. AO that cash was being received by the Appellant from such sellers after deduction of commission, no disallowance could have been made qua the Appellant on account of 'bogus purchases'. The Ld. Jt. CIT(A) erred in not appreciating that once payment has been validly effected by the Appellant to the sellers, the Appellant has no control over the affairs of the sellers.

6. Without prejudice, and in the alternative, the Ld. Jt. CIT (A), Natio

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