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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This is a batch of two appeals filed by the assessee arise from separate orders dated 05.03.2026 for AY 2011-12 and 19.03.2026 for AY 2012-13, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A), NFAC.
Both these cases pertain to the same assessee for AY 2011-12 & 2012-13 and for the sake of convenience both these appeals are being disposed of through a single order. ITA No.6074 pertaining to AY 2011-12 will be taken as the lead case.
In both the years there is an allegation of bogus purchases from one M/s Akshay Sales Corporation (Prop. Bijender Jain). It is recorded that information was received from the Investigation Wing about the assessee being a beneficiary of accommodation entries from M/s Akshay Sales. Thereafter, the Ld. AO issued a notice to Shri Bijender Jain and after not receiving any response, asked the assessee to produce the said Shri Bijender Jain from whom allegedly bogus supplies of Rs.322,26,000/-were received. Thereafter, the Ld. AO made an addition of Rs.305,72,143/- on account of alleged bogus accommodation entry and also made an addition of Rs.611,443/- u/s 69C of the Act on estimated commission paid @2% for arranging the said bogus entry. The aggrieved assessee approached the CIT(A) where also he could not succeed on the basis of finding that in case of allegation pertaining to an accommodation entries mere paper trail pertaining to the impugned transaction was not enough and there was a requirement of proving the actual physical movement of goods. The Ld. CIT(A) has distinguished considerable number of case laws filed by the assessee in his support and thereafter has upheld the action of Ld. AO.
Further aggrieved, the assessee has now approached the ITAT with very lengthy and argumentative 10 grounds of appeal. These grounds of appeal challenge the additions on merit and also ground of appeal no.2 specifically challenges the denial of sufficient opportunity of being heard since the opportunity of hearing through virtual mode was not provided by the Ld. CIT(A). It is also a grievance that each and every ground of appeal was not adequately adjudicated by the Ld. CIT(A).
Before us the Ld. AR argued with the help of a paper book and written submissions. It was the submission that the assessee had produced all manner of documents to prove the impugned transaction and it was argued that in case Shri Bijender Jain was not responsive to the notices issued by the Ld. AO then the assessee could not be faulted since Shri Bijender Jain is a witness and the assessee wanted to cross-examine him as well. It was a further submission that the Ld. AO rushed through the assessment proceedings, with very little time for the assessee to responding appropriately. It was also argued that the ground for reopening and the material in possession of the Ld. AO, against the assessee, was never adequately shared with the assessee. The Ld. AR requested that either the impugned additions should be deleted on the strength of documents supplied by the assessee or the matter may be remanded back to then file of Ld. CIT(A) for providing an adequate opportunity of being heard.
The Ld. DR, on the other hand, supported the orders of the authorities below and stated that the assessee was responsible for proving the transactions claimed as genuine by him, in his books of account. It was averred that the assessee had not been able to prove the physical movement of goods as would be the case in genuine transactions of supply of goods.
We have carefully considered the rival submissions and have gone through the records before us. We find that in this case, the material in possession of the Revenue appears to have been extracted in the body of the assessment order, however, the assessee has raised a grievance that not enough opportunity was provided by the Ld. CIT(A) in terms of the grounds of appeal as per Form 35. We find some force in the Ld. AR’s contention that all the grounds raised before the Ld. CIT(A) have not been adequately adjudicated. Considering the totality of facts and circumstances of the case, we deem it fit to set aside the impugned order (ITA 6704) and remit this matter back to the file of Ld. CIT(A) for fresh adjudication. We direct that the Ld. CIT(A) would provide adequate opportunity of being heard and also provide an opportunity of hearing through video conference, if that is possible. Thereafter, the Ld. CIT(A) would pass a speaking order on all the grounds raised by the assessee.
Since the facts are largely similar in both the appeals, hence, ITA 6075 is also, mutatis mutandis, remitted back to the file of Ld. CIT(A), with the same terms as for ITA 6074.
In the result, both the appeals are partly allowed for statistical purposes.