Red Ray Laboratories vs ITO, Ward-3(4), Nagpur

Parties Involved

Facts Summary

The assessee, Red Ray Laboratories, is a partnership firm engaged in the manufacturing of plastic packaging products for commercial explosive companies. The assessee declared an income of Rs. 10,61,600/- for the Assessment Year 2020-21. Based on information from search and seizure proceedings carried out on M/s. Special Blasts Ltd. group, the Assessing Officer (AO) found tally data indicating that the assessee made bogus purchases amounting to Rs. 36,29,200/-. The assessee denied making any purchases from M/s. SBL Energy Ltd. and claimed to have regular sales transactions with them. The AO made an addition for bogus/unaccounted purchases of Rs. 36,29,200/- and assessed the total income at Rs. 46,90,800/-. The assessee appealed to the Commissioner of Income Tax (Appeals) but was unsuccessful and now appeals to the Tribunal.…

Legal Issues

• 1. Illegal Reassessment Proceeding
• 2. No Cross Examination Opportunity Provided
• 3. Addition despite Categorical denial of transaction by Appellant
• 4. Addition without cogent Material
• 5. No corroborative Evidences of Bogus Purchase Provided
• 6. Unwarranted addition under section 69C

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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