Sanjay Agarwal Industries Pvt Ltd. Company vs. ITO, Ward-6(1), Pune

Parties Involved

Facts Summary

The assessee, Sanjay Agarwal Industries Pvt Ltd., is a private limited company engaged in the business of dealing in Railway waste and scrap. For the Assessment Year 2019-20, the assessee filed its return of income declaring a total income of Rs. 15,40,740/-. The case was reopened under section 147 of the Income Tax Act, 1961, due to the assessee's huge transactions of Rs. 5,57,21,146/- and acceptance of accommodation entries from Raja Cement House, a paper/shell entity. The Assessing Officer estimated the profit at 12.5% on the alleged bogus purchases and made an addition of Rs. 82,18,870/-, determining the total income at Rs. 97,59,610/-. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal, upholding the Assessing Officer's order.…

Legal Issues

• 1. Whether the addition of Rs. 82,18,870/- made by the Assessing Officer on account of bogus purchases is justified?
• 2. Whether the Commissioner of Income Tax (Appeals) erred in relying solely on departmental information without conducting independent verification?
• 3. Whether the authorities below failed to appreciate the documentary evidences supporting the genuineness of the purchases?
• 4. Whether the authorities erred in disregarding the fact that the corresponding sales have been accepted and that a significant portion of the stock plus purchases were sold during the year?
• 5. Whether the authorities violated the principles of natural justice by making/confirming the addition without confronting the appellant with any adverse material and without affording an opportunity of cross-examination?
• 6. Whether the Assessing Officer erred in arbitrarily estimating profit @12.5% of alleged bogus purchases without any basis or supporting evidence?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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