IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORESHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.2957/Mum/2024 (Assessment Year: 2021-22)

Hakimuddin Saleh Porbandarwala v Commissioner of Income Tax

283-A, Abdul Rehman Street, A R s (Appeal), Delhi Street, Mumbai-400 003 PAN : AAJPP6474G APPELLANT RESPONDENT Assessee by : Shri Manoj Mahimkar a/w Shri Abdullah Bharmal Respondent by : Shri Hemanshu Joshi (SR DR)

Date of hearing : 16/01/2025 Date of pronouncement : 27/01/2025

O R D E R

PER ANIKESH BANERJEE:

Instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 29/04/2024 for A.Y. 2021-22. The impugned order was emanated from the order of the Assessment Unit, Income-tax Department, passed under section

143(3)read with section 144B of the Act, date of order 28/12/2022.

2. The assessee has taken the following grounds of appeal: -

“1. The Ld. Commissioner of Income Tax (Appeals) on the facts and circumstances of the case and law, has erred by disallowing 100% of the purchase of Rs.57,39,833/- from M/s. Jay Enterprises under section 69C of the Income Tax Act, 1961.

2. That the Ld. Commissioner of Income Tax (Appeals) has failed to appreciate the fact that the statement of Shri. Rajkumar, on whose statement reliance is placed for arriving at an adverse inference against the Assessee, has not been furnished to the Assessee during the Assessment Proceedings and hence there being gross violation of principles of natural justice.

3. The Ld. Commissioner of Income Tax (Appeals) on the facts and circumstances of the case and law, has erred by disallowing 25% of the purchases of Rs.20,73,105/-from M/s. The Meridian under section 69C of the Income Tax Act, 1961.

4. That the Appellant craves, leave to add, amend, alter, and delete any of the ground of appeal before the hearing.”

3. The assessee is engaged in the business of trading in fabric and cloth. During the impugned assessment year, the assessee continued its business operations. Based on information received from the Sales Tax Department of Maharashtra, the Ld. AO conducted an assessment, verified the purchases, and issued notices under Section 133(6) of the Act. Upon verification, the Ld. AO observed that purchases amounting to Rs.1,80,13,813/- were allegedly bogus. Additionally, purchases amounting to Rs.57,39,833/- were attributed to transactions with Shri Rajkumar, who denied any dealings with the assessee. Consequently, the Ld. AO added back 25% of the alleged bogus purchase amount of Rs.1,80,13,813/- (calculated as Rs.4,50,34,530/-) and the alleged purchase amount of Rs.57,39,833/- under Section 69C read with Section 115BBE of the Act.

Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee, fully confirmed the addition related to purchases amounting to Rs.57,39,833/- attributed to Shri Rajkumar. Regarding the remaining addition, the assessee was able to submit confirmations amounting to Rs.39,85,177/- out of Rs.45,03,453/-. As a result, the Ld. CIT(A) restricted the addition to Rs.20,73,103/- and further reduced the addition to 25% of the confirmed amount, which totaled Rs.5,18,276/-. The balance addition of Rs.39,85,177/- was deleted.

Accordingly, the appeal was partly allowed by the Ld. CIT(A). Being aggrieved by the appellate order, the assessee has preferred the present appeal before us.

4. During the appeal proceedings, the Ld.AR filed a written submission which is kept in the record. The Ld.AR submitted that the assessee has been maintaining books of account for the relevant purchases and the payments are duly booked in the books of account and in assessment proceedings and in appeal proceedings, the assessee submitted all the relevant documents including the co