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Judgment
PER MADHUMITA ROY, JM:
The instant appeal filed by the Assessee is against the order dated 15.01.2026 passed by the Ld. Commissioner of Income Tax (Appeals)-30, New Delhi, (hereinafter referred to as ‘Ld. CIT(A)’) airing out of the Assessment Order dated 27.03.2025, passed by the ACIT, Central Circle-29, New Delhi (hereinafter referred to as the "AO")passed under Section 147 r. w.s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2020-21.
The assessee is a partnership firm engaged in manufacturing of paper products and printing activities filed its return of income 19.10.2020 declaring income at Rs.30,51,320/-. The same was processed under Section 143(1) of the Act. Subsequently, on the basis of a search and seizure operation conducted on M/s Mankind Pharma Groups & Ors. and other related entities based in Delhi region and outside Delhi on 11.05.2023, wherein, various incriminating documents/evidences in respect to the assessee itself was found and seized. The case of the assessee was centralized to the office under Section 127 of the Act, which was initially challenged by the assessee before the Hon’ble Haryana High Court, whereupon, the order of Stay dated 28.03.2024 was passed, subsequently, the Stay was vacated. As the Writ petition stood infructuous, in view of the subsequent proceedings dated 10.05.2024 issued by the Chief Commissioner of Income Tax, Circle No.2. The order passed by the Hon’ble Himachal Pradesh High Court has also been annexed by the assessee at page 132 of the paper book filed before us. It is the case of the assessee that the assessee made representation dated 09.12.2024, which was not taken into consideration by the Ld. AO in its proper perspective in order to record the stay order passed by the Hon’ble Himachal Pradesh High Court.
Having regard to the fact of representation having been made on 09.12.2024 which is much after the final disposal of the order by the Hon’ble Himachal Pradesh High Court, such contentions made by the assessee in not staying hands by the authorities below in the matter is not acceptable.
The facts before us is this that the case was reopened under Section 148 of the Act. The Ld. Assessing Officer while making the addition on account of bogus purchases observed as follows:-
“7.Addition on account of bogus purchases: 7.1 In view of the above discussion, on the basis of the incriminating material found during the course of search proceedings at various premises of the group, in post search investigation and during the assessment proceedings, it is found that M/s A C Goel Paper Distributing Pvt. Ltd. the entity controlled by Sh. Akash Goal and Ashwin Goel is providing entries of bogus sales and purchases in lieu of commission. 72 The assessee M/s Shri Ram Print N Pack during the veer under consideration has taken bogus purchase entries of Rs. 18,85,860/-from M/s A C Goel Paper Distributing Pvt Ltd. It is pertinent to mention here that the assessee has taken entry of bogus purchases from the entities of M/s A C Goel Group and assessee was accorded sufficient opportunity to explain the same, however, the assessee has failed to give any plausible explanation to justify the bogus purchases made during the year under consideration from the above mentioned entities. Further, the assessee has beer unable to brove corresponding sales in respect of these bogus purchases. 7.3 Based on the material available on records and reasoning mentioned above, entries of bogus purchases of Rs. 18,85,860/- from M/s A C Goel Paper Distributing Pvt Ltd remained unexplained and therefore, the same comes under the purview of section 37 of the Income Tax Act, 1961. 7.4 The relevant portion of section 37 is as under:
"37.(1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession"
7.5.Accordingly, an amount of Rs.18,85,860/- is disallowed on account of bogus purchase expenses u/s 37 of the Income Tax Act, 1961 and added to total income for the corresponding period for the F.Y. 2019-20 relevant to AY 2020-21.”
The Ld. CIT(A) in appeal dealt with the matter in proper perspective and confirmed the addition with the following observations:-
7.Ground No. 1: The appellant contends that the reopening u/s 147 r.w.s. 148 is bad in law due to jurisdictional issues, non-compliance with s.151A, absence of material for escapement of income, and improper reliance on third-party information. The AO, ACIT Central Circle-29, New Delhi, acquired jurisdiction post the search u/s 132 on related entities, as the incriminating material pertained to centralized proceedings under the Central Charge, overriding territorial jurisdiction as per CBDT notifications. Moreover, the AO has in detail documented the issue of jurisdiction.AO observed in the order that "The assessee filed appeal Civil Writ Petition No.2651 of 2024 before the Hon'ble High Court. In pursuance to the Hon'ble High Court order dated 28.03.2024 the PAN of assessee was retransferred to ITO Ward Parwanoo vide order u/s 127 dated 23.04.2024 passed by P.CIT (Central)-3, New Delhi. Further, opportunity of being heard was allowed to the assessee case of assessee was again centralized to this office vide order u/s 127 of the Income Tax Act, DIN No. ITBA/COM/F/ 17/2024-25/ 1073687713(1) dated 25.02.2025 passed by the Pr. Commissioner of Income Tax Chandigarh-1."
7.1It is to be noted that the search u/s 132 unearthed specific documents listing the appellant as a beneficiary of bogus billing from M/s A C Goel, constituting information' u/s 147 sufficient to form a reasonable belief of escapement. Thus, the reopening is upheld as valid and sustainable.”
Having regard to the concrete evidence found from the searched premises including the ledger and digital records and further the conversation of the directors in regard to issuance of accommodation bills without corresponding goods supply or delivery and particularly in the absence of proof of actual receipt of goods, the bank payments as not found to be sufficient to prove the genuineness of the transaction and thereby holding entire transaction as accommodation arrangements by the Ld. AO and further confirmed by the Ld. First Appellate Authority found to be just and proper so as not to warrant any interference. Hence, the appeal of the assessee is dismissed.
In the result, the appeal of the assessee is dismissed.