INCOME TAX OFFICER 19(1)(1), , MUMBAI vs. BADAMIDEVI TEJRAJ MUTHA, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the Revenue is directed against order dated
06.01.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – 51, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2011-12, raising following grounds:
1. Whether on the fact and circumstances of the case, the Ld.
CIT(A) has erred in restricting the addition to the extent upto
12.5% as against 100% addition made by the AO, on account of total bogus purchases of Rs. 2,39,, 19,729/- from 13 hawala traders by ignoring the fact that the assessee has availed the accommodatio expenses and 2." Whether o
CIT(A) has e
12.5% as aga total bogus p the fact that t information r
(Inv.), Mumba providing onl bogus sales/p and the asse have obtained
2,39,19,729/
3. Whether o
CIT(A) has e
12.5% as aga fact that dur could neither
Sales, Stocka could produce provided by th
4. ⁠4. Whethe
CIT(A) has e
12.5%, by ig accommodatio creditworthine notices issued on the given remarks " N transactions w were purporte
5." Whether o law, the Ld.
ignoring that purchases w committed in Added Tax A allowed as pe
6. Whether o law, the Ld. C the Hon'ble S on entries for bogus purchases to d thereby suppress the true profit ?"
on the fact and circumstances of the ca rred in restricting the addition to the e ainst 100% addition made by the AO, on purchases of Rs. 2,39,19,729/ without a the action of the assessing officer was ba received from Sales Tax Department th al, that these 13 hawala traders were ly accommodation entries in the form purchases/Loans, without actual deliver essee was found to be one of the benef d accommodation entries of alleged purch
- from 13 such hawala traders?"
on the fact and circumstances of the ca rred in restricting the addition to the e ainst 100% addition made by the AO, by i ring the Re-assessment Proceedings, th produce the quantity tally of day to day a, Delivery Challans and corresponding e the parties for verification, in-spite of he Assessing Officer?"
er on the fact and circumstances of the ca rred in restricting the addition to the e gnoring the fact that the assessee h on entries, but failed to prove the genu ess of th transaction and of parties als d u/s 133 (6) of the Act, to verify the haw n addresses, has been returned back
Non Known or Left, which proves with all hawala traders were not a genu edly made?"
on the facts and circumstances of the c
CIT(A) has erred in restricting the a t though there was no dispute that were made and so act of infraction of violation of section 74(1A) of the Maharas
Act, 2022 and therefore, such expen er express provisions u/s. 37 of the Act?"
on the facts and circumstances of the c
CIT(A) has erred in not appreciating the upreme Court in the case of M/s. N. K. P
Badamidevi Tejraj Mutha
2
inflate the ase, the Ld.
extent upto n account of appreciating ased on the hrough DGT involved in of issuing ry of goods ficiary who hases of Rs.
ase, the Ld.
extent upto ignoring the e assessee purchases, values nor opportunity ase, the Ld.
extent upto has availed uineness &
so and the wala traders k with the that such uine one but case and in addition by the bogus f law was shtra Value nses is not case and in decision of Proteins Ltd.

Vs. Dy. CIT wherein Hon held that on purchases sh in the P & L the addition t of section 68 a 7. " Whether law, the decis the Hon'ble H of Income-Tax
Taxmann.com decision of 1
rejecting the I on bogus pu such unexpla though the a genuineness explanation of such purchas
8. " Whether law, the Ld. C the order of Proteins Ltd.
963/2017, D bogus purcha the law of the on 06.01.202
9. ⁠9. "Wheth in law, the Ld in the case of ITAT Ahmada purchases, by parties were f upheld by Ho
Supreme Cou
10. The appe filed, in view
77,80,554/-,
CBDT's Circu
No. 09/2024
one of the ex
CBDT's Circu

(2016) 292 CTR (Guj.) 354, Dated. 1
'ble Supreme Court has dismissed the a nce a findings of act has been given hown on the basis of fictitious invoices a account are established as bogus, then to a curtained percentage goes against th and 69C of the Income-Tax Act, 1961?"
on the facts and circumstances of the c sion of Ld. CIT(A) is right, in view of the High Court Mumbai, in the case of Pr. Co x-5, Mumbai Vs. Kanak Impex (India) Ltd m 283 (Bombay) Dated. 03.03.2025, w
00% addition made by AO has been a ITAT's decision of estimating the profit ra rchases and thereby impliedly grant d ained expenditure incurred u/s. 69C of th assessee failed to discharge its onus to of alleged purchases and has o of the sources of expenditure incurred on es ?"
on the facts and circumstances of the c
CIT(A) is perverse in not considering the Hon'ble Supreme Court in the case of Vs. Dy. CIT (2016) 292 CTR (Guj.) 354,
Dated. 16.01.2017, which is on the simil ases, which has been confirmed and w e land, when the Ld. CIT(A) has pronounc
5?"
her on the facts and circumstances of th d. CIT(A) has erred in not appreciating th of M/s. Swetamber Steels Ltd. (Supra), abad, had confirmed the disallowance of y stating that the purchases shown from found non-genuine and the decision of th
Hon'ble Gujrat High Court and also by t rt?"
eal u/s. 253A of the Income-Tax Act 196
w of Tax- Effect involved in the instant c which is above the prescribed limit menti lar F.No.279/Misc. 142/2007-ITJ(Pt) am dated. 17.09.2024 and this case also f xceptions specified in paragraph 3.1(c) of ular No.05/2024 Dated. 15.03.2024, wh
Badamidevi Tejraj Mutha
3
16.01.2017, appeal and that entire and debited n restricting e principles case and in decision of mmissioner
((2025)172
wherein the allowed, by ate @12.5%
eduction of he Act, even o prove the offered no n account of case and in decision of M/s. N. K.
SLP (CC) of lar issue of was already ced its order he case and he fact that the Hon'ble f the bogus m respective he ITAT was the Hon'ble
61, is being case is Rs.
ioned in the mended vide falls under f the of the herein it is stated that in cases of accom
2. Briefly stated, appeal are that the business of trading i proprietary concern assessee filed her r declaring a total inco processed and selec
Income-tax Act, 1961
2.1 During the cou
Assessing Officer (he had effected purcha identified by the Maharashtra, as bein issuing accommodati
2.2 The Ld. AO, i purchases, issued n thirteen (13) of the returned unserved w
“left”. Consequently, calling upon the ass purchases by produ supporting evidence n cases involving "Organized Tax Evasion mmodation entry of bogus purchases.
the material facts giving rise assessee, an individual, was in ferrous and non-ferrous met styled as M/s. Rajendra Forge return of income on 30th Se ome of ₹11,04,002/-. The said r cted for scrutiny under the pr
1 (hereinafter referred to as “the urse of the scrutiny assessmen ereinafter “Ld. AO”) observed th ases from certain entities wh
Sales
Tax
Department,
G ng non-genuine or hawala dea ion bills without actual delivery in order to verify the genuin notices under Section 133(6) said parties. However, all suc with postal remarks such as “
the Ld. AO issued notice under sessee to substantiate the genu ucing the concerned parties es such as delivery chall
Badamidevi Tejraj Mutha
4
n" including to the present engaged in the tals through her
Industries. The eptember, 2011
return was duly rovisions of the Act”).
nt, the Learned hat the assessee hich had been Government of alers engaged in of goods.
neness of such of the Act to ch notices were “not known” or r Section 142(1) uineness of the and furnishing ans, proof of transportation, and informed the fact of o of the Maharashtra G
2.3 In response, t payment vouchers re and delivery challan transportation of goo produce the supplie while the sales corres recorded and accep existence, and delive the purchases unv assessee had merely purchases actually m he disallowed the e purchases from the s
3. On appeal, the L
AO that the assesse proving the genuine taking into account t of the Tribunal in sim case for earlier years
1.5% of the alleged b payment details. The Assessi observation made by the Sales T
Government regarding those par the assessee produced copie eflecting payments through ban ns. Nonetheless, she failed to f ods or payment of freight charge rs for verification. The Ld. AO sponding to the impugned purch pted, the failure to establish ery of goods from the said sup verifiable. He therefore conclu y procured accommodation bil made from unaccounted sourc entire amount of ₹2,39,19,729
said parties.
Ld. CIT(A) concurred with the fi e had failed to discharge the p eness of the impugned purch the consistent view of the Co-or milar matters, including in the s, the Ld. CIT(A) restricted the bogus purchases, holding that Badamidevi Tejraj Mutha
5
ing Officer also Tax Department rties.
es of invoices, nking channels, furnish proof of s, nor could she
O observed that hases were duly h the identity, ppliers rendered uded that the lls to regularise es. Accordingly,
9/- representing inding of the Ld.
primary onus of hases. However, rdinate Benches assessee’s own disallowance to the addition of the entire purchase not been doubted.
4. When the appe appeared on behalf o is also noticed from t had been adjourned the assessee. In the p nor any application the assessee is not i the appeal was hear submissions advance
(Ld. DR).
5. The Ld. DR, in on the judgment of Kanak Impex (India wherein the Hon’ble has failed to subst parties found to be n been accepted as gen has obtained accom procured from undisc of such unrecorded p investment liable to b down by the Hon’b value would be excessive sinc eal was taken up for hearing b of the assessee despite due serv the record that on earlier occas on the written request of the present instance, there was neit seeking adjournment. It is thu nterested in pursuing the appe d ex parte qua the assessee, a ed by the Learned Departmenta the course of his submissions, f the Hon’ble Bombay High Co a) Ltd. [2025] 172 taxmann.co
Court has enunciated that whe tantiate the genuineness of p non-existent, yet the correspon nuine, a presumption arises th mmodation bills and that th closed sources, i.e., the grey ma procurement, being unexplained be taxed under the Act. Applyin ble High Court in the aforesa
Badamidevi Tejraj Mutha
6
e the sales had before us, none vice of notice. It ions, the matter
Ld. Counsel for ther appearance s apparent that eal. Accordingly, after hearing the l Representative placed reliance ourt in PCIT v.
om 283 (Bom), ere the assessee purchases from nding sales have hat the assessee he goods were arket. The value d, constitutes an ng the ratio laid aid decision, it becomes evident tha
CIT(A) at 1.5% of th proper factual re-exa
5.1 We, therefore, s issue and remit the Officer for a de novo light of the principles in Kanak Impex (Ind due opportunity to Officer.The grounds statistical purposes.
6. In the result, statistical purposes.
Order pronoun (NARENDER KUMA
JUDICIAL M
Mumbai;
Dated: 29/10/2025
Rahul Sharma, Sr. P.S.

at the restricted addition susta he purchases cannot be susta amination in light of the law so d set aside the findings of the Ld matter back to the file of the adjudication in accordance with s laid down by the Hon’ble Bom ia) Ltd. (supra). The assessee s substantiate her claim before of appeal are merit accordin the appeal of the Revenue nced in the open Court on 29
/-
S
AR CHOUDHRY)
(OM PRAK
MEMBER
ACCOUNTA

Badamidevi Tejraj Mutha
7
ained by the Ld.
ained without a declared.
d. CIT(A) on this e Ld. Assessing h law and in the mbay High Court hall be afforded e the Assessing ngly allowed for is allowed for /10/2025. KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

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ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Badamidevi Tejraj Mutha
8
R, gistrar) umbai