ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4(3), MUMBAI, MUMBAI vs. ABANS JEWELS LIMITED, MUMBAI

PDF · subscribers
ITA 700/MUM/2026Status: DisposedITAT Mumbai17 August 2026AY 2019-2011 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeals, noting that the tax effect was below the prescribed monetary threshold. It also relied on previous decisions in the assessee's own case where similar additions were deleted.

What were the facts?

The Revenue appealed against the deletion of additions made on account of estimated commission on purchases from allegedly non-genuine entities. The assessee had provided documentary evidence for these purchases.

What were the issues?

Whether additions based on estimated commission on purchases from non-genuine entities are sustainable when the assessee provides supporting documents. Whether the Revenue's appeal is maintainable due to low tax effect.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI PAWAN SINGH & SHRI GIRISH AGRAWAL

Hearing: 19.05.2026Pronounced: 17.08.2026

Heard together (3 matters)

CO. No. 118/MUM/2026
ITA 700/Mum/2026
CO. No. 116/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / ORDER

PER BENCH: These two appeals filed by the Revenue and cross objections filed by the assessee are against the orders of ld. CIT(A) 54, Mumbai passed against the assessment orders by ACIT/DCIT (CC)-4(3), Mumbai. Consolidated details of these appeals and cross objections are tabulated below: Sr. ITA Order of CIT(A) Assessment order Assess- Appeal No. No./CO No. ment year /CO by No. Date Passed by Date Passed u/s. 1 ITA ITBA/APL/S/250/2 27.11. ACIT(CC)-4(3), 31.03.2024 147 2019- Revenue 700/MUM 025- 2025 Mumbai 20 /2026 26/1083081260(1) 2 CO ITBA/APL/S/250/2 27.11. ACIT(CC)-4(3), 31.03.2024 147 2019- Assessee 118/MUM 025- 2025 Mumbai 20 /2026 26/1083081260(1) 3 ITA ITBA/APL/S/250/2 27/11 DCIT(CC)-4(3), 31.03.2024 147 2019- Revenue 701/MUM 025- /2025 Mumbai 20 /2026 26/1083083027(1) 4. CO ITBA/APL/S/250/2 27/11 DCIT(CC)-4(3), 31.03.2024 147 2019- Assessee 116/Mum 025- /2025 Mumbai 20 /2026 26/1083083027(1)

2.

We first take up ITA No. 700/Mum/2026 filed by the Revenue. Brief facts as culled out from the records are that assessee is engaged, inter alia, in the business of manufacturing refined gold bars and trading in gold coins, gold chains, silver and other commodities. Assessee filed its return of income reporting total income at Rs.3,10,26,630/-. A survey under section 133A was conducted in the Abans Group on 03.12.2019. Subsequently, information was received from the Investigation Wing regarding certain entities from whom assessee had made purchases. Assessment was reopened under section 147 by issuing notice under section 148A(b) on 24.02.2023. Assessee furnished its reply and thereafter, order under section 148A(d) was passed on 24.03.2023. Notice under section 148 was issued on 25.03.2023. During reassessment proceedings, ld. Assessing Officer examined purchases aggregating to Rs.481,05,22,602/- from the following four entities: Sr. No. Name of entity Purchases (Rs.) 1. Asterpetal Trade & Services Pvt. Ltd. 252,97,65,435 2. Mavaiya Enterprises Pvt. Ltd. 40,33,00,600 3. Trishna Trading Services Pvt. Ltd. 111,21,51,417 4. Yogdarshan Commercial Trading Pvt. Ltd. 76,53,05,150 Total 481,05,22,602

2.1. Ld. Assessing Officer even though treated the above parties as non-genuine, however, did not disallow the entire purchases. He proceeded to estimate commission income at 0.25% of the aggregate purchases, resulting in an addition of Rs.1,20,26,306/-. The assessment order records that the basis for such addition was the alleged prevailing market practice in accommodation entry transactions. Observation of ld. AO is important to be taken note of whereby it is stated that “it can be seen that there cannot be sales without purchase but at the same time as per the discussion made above, it is also proved purchases made from these non-genuine entities are not verifiable and hence it can be fairly concluded that the concerned purchase transactions recorded in the books of accounts don not reflect the true picture of the profits of the assessee……………….the additional net profit of the assessee from the above bogus transactions of business is estimated at 0.25% of the total purchases from non-genuine entities….” [emphasis supplied by us by underline]. Ld. CIT(A), after considering the submissions and material placed on record as well as relying on decision of the Coordinate Bench in assessee’s own case, deleted the addition.

2.2. Assessee had furnished documentary evidence in support of the purchases and had specifically disputed the allegations made on the basis of the investigation report. Assessee pointed out that the purchases were supported by purchase registers, ledger accounts, banking transactions and other documentary evidence. In relation to Yogdarshan Commercial Trading Pvt. Ltd., assessee specifically submitted that payments were made through account-payee cheques, were reflected in the bank statements and that there was no evidence of any cash being received back by assessee. Assessee also contended that statements of third parties/directors relied upon by ld. Assessing Officer had not been supplied and no opportunity of cross-examination had been granted. List of documents furnished by the assessee is as under: i. Purchase Invoices ii. Warehouse receipt for goods deposited in warehouse iii. Delivery order received from supplier iv. Bank statement evidencing payment made by the Company for the said purchases v. GSTR 2A for the month of April, 2018 & May, 2018 vi. Ledger in the books of the Assessee

4.

At this stage, it is important to note that during the course of the business

3.

Ld. CIT(A) following the decision of the Tribunal in assessee's own case for AYs 2018-19, 2020-21 and 2021-22 in ITA Nos. 3516, 3517 and 3518/Mum/2024, dated 30.09.2024 and other group entities with lead case of Abans Commodities (I) Pvt. Ltd., deleted the addition. Aggrieved, Revenue is in appeal before the Tribunal.

3.

At the outset, we note that the issue involved in the present appeal is squarely covered by the decision of the Co-ordinate Bench in assessee’s own case which in turn is based on the findings arrived at in ITA Nos.3315/Mum/2024 and others in the case of lead entity of the Abans group viz. M/s. Abans Commodities (I) Pvt. Ltd. The said decision considered the very same nature of allegations concerning purchases from alleged non-genuine entities and, more importantly, the very same methodology of estimating commission at 0.25% of the purchases. Relevant portion of the said order is reproduced below for ready reference: “24. We have heard the rival submissions and also perused the materials placed on record. It is seen that the ld. AO had treated the purchases from 6 entities as non-genuine and has applied profit rate of commission on such purchases @0.25%. He has accepted that these purchases are duly recorded in the books of accounts, and has not disturbed the purchases. However, according to him as per market practice there is commission rate of obtaining such entry at @0.25% which needs to be added. First of all in so far as the transactions of purchases from these parties are concerned, the same had not been doubted for the reason that ultimately the ld. AO’s allegation is that assessee might have earned commission on such purchases as these are non genuine parties with no credentials and on inquiry by the investigation wing various facts have emerged about their credibility. Now before the AO assessee has submitted the following documents: (i) Purchase invoices; (ii) Warehouse receipts showing physical receipt of the goods in the warehouse; (iii) Delivery Orders; (iv) Bank statements demonstrating payment towards the purchases; (v) GST returns showing receipt of the goods and availment of input tax credit on such purchases.

If these documents have not been doubted then where is the question of making adhoc addition of commission on such purchases. If these documents have not been doubted then where is the question of making adhoc addition of commission on such purchases. 25. Coming to the various allegations made by the AO and the rebuttal given by the assessee before the AO as well as before the CIT(A), it is seen that one of the allegations of the AO was that the source of funds in capital of these entities are less compared to the turn over. What was required to be seen is whether there was actual trading or not as trading does not require large own capital but what are the source of funds in their balance sheet. Another allegation regarding e-mail was only by the Abans group. There was nothing which has been brought on record by the ld. AO that e-mail was actually being handled by the Abans group nor he has mentioned who was operating the said e-mail. In so far as ITR filed from the premises of Abans group from a particular IP address, assessee has categorically denied that it is incorrect and no such ITR has been filed from the IP mentioned in the order but from some other IP address which was provided before the ld. CIT(A). This has not been rebutted by the department. In so far as the shareholders were not men of means, already it has been brought on record that they were filing their regular income tax returns and have shown investment of share capital from their own sources. In any case, this cannot be the ground for treating the transaction as non-genuine. 25.1……………….If the ld. AO has simply relied upon the comments of the investigation wing and he did not ask the assessee during the course of assessment proceedings to file their confirmations and he could have independently verified once the assessee had stated that all the Directors were available at the premises and ld. AO can ask for their attendance which ld. AO had failed to do so. In so far as books of accounts found in the audit report from the premises, the assessee’s contention was that neither, the Investigation Wing nor the ld. AO had provided the evidence in support of such allegation nor any details of content of data and period to which it pertain was provided or found. Thus, such ground cannot be adversely viewed. Once these facts were brought on record, ld. AO should have at least himself carried out any enquiry or verification rather than blindly apply and relying upon the investigation report. In any case, the case of the ld. AO is that assessee might have earned commission from such purchases of 0.25% which cannot be sustained as ld. AO has applied commission of 2% and reduced to 0.25% by CIT(A) are on mere conjecture. It is not a case where the entire purchases have been added, albeit ld. AO has presumed that assessee might have earned commission on such purchases made from non- genuine parties. Accordingly, such adhoc application of commission of 0.25% is deleted. 26. Similar issue of application of commission of 0.25% has been applied for the A.Y.2016-17, 2018-19 and 2020-21, therefore, in view of the finding given hereinabove, such addition on account of adhoc commission are deleted.”

3.1. Specific to assessee’s own case (supra), the Coordinate Bench gave its findings based on the conclusion drawn in the above paragraphs reproduced above. Paragraphs specific to the assessee are also reproduced for ready reference from the same order: Abans Jewels Ltd. 45. In various years following additions/disallowances have been challenged by the assessee:- Sr. AY Appeal No. Non-genuine Total Addition No. purchases 1 2018-19 3516/M/2024 49,07,630 49,07,630 2 2020-21 3517/M/2024 1,52,88,087 1,52,88,087 3 2021-22 3518/M/2024 74,39,867 74,39,867 Total 2,76,35,584 2,76,35,584 6. Here again the addition has been made from purchases made five entities namely, Asterpetal Trade & Services Pvt. Ltd., Mavaiya Enterprises Pvt. Ltd., Manmish Traders Pvt. Ltd., Yogdarshan Commercial Trading Pvt. Ltd. and Trishna Trading Services Pvt. Ltd., and assessee had submitted all those documents proving the evidence of the purchases which are as under:- (i) Purchase invoices (ii) Warehouse receipts showing physical receipt of the goods in the warehouse (iii) Delivery Orders (iv) Bank statements demonstrating payment towards the purchases (v) GST returns showing receipt of the goods and availment of input tax credit on such purchases 47. Again, Id. AO has made some allegations with regard to all the entities which has been dealt earlier. Accordingly, in view of our finding given in the other appeals, addition on account of alleged commission of 0.25% of such purchases are deleted.

3.2. The Co-ordinate Bench also considered the reliance placed on the statement of Shri Arun Shah of M/s. Aryav Securities and recorded as under: “Now coming to the notional addition of commission u/s.69C for non-genuine losses, it is seen that same is based on statement of Shri Arun Shah of M/s. Aryav Securities allegedly recorded in the course of ‘Project Falcom’. However, nowhere in such statement there is any reference of the trade carried out by the assessee or involvement of the assessee. Further, if such statement was to be relied, then law provides that same should have been confronted with the assessee to rebut or cross examine. There is no evidence brought on record that assessee had actually paid such expenses outside the books and the entire addition is based on conjecture.”

3.3. Co-ordinate Bench thereafter applied the same principle in cases involving purchases from Yogdarshan Commercial Trading Pvt. Ltd. and Trishna Trading Services Pvt. Ltd., observing:

“Here also assessee had submitted all the documents and AO has made similar allegations based on investigation report to which assessee has given similar counter submissions which is not reproduced here. Thus, in view of the finding given in the above appeals, adhoc addition on account of commission @0.25% is deleted.”

4.

We have carefully considered the aforesaid findings of the Co- ordinate Bench and find that the issue before us is materially identical. In the present case also, the Assessing Officer has not made an addition of the purchases themselves. The purchases aggregating to Rs.481,05,22,602/- stand recorded in the books of account. The impugned addition has been made solely by presuming that the assessee must have earned commission at 0.25% for obtaining alleged accommodation entries. The very basis of such estimation has already been considered and rejected by the Co-ordinate Bench in the aforesaid decision. Respectfully following the aforesaid decision and there being no divergence on the material facts as in the present case, grounds raised by the Revenue in its appeal are dismissed.

5.

In the result, appeal of the Revenue is dismissed.

6.

Assessee has filed its cross objection in CO 118/Mum/2026, against the appeal filed by the Revenue. From the perusal of the grounds in the cross objection, we note that they are nothing but supporting the order of ld. CIT(A). All the contentions raised through several grounds of cross objection have already been addressed and considered by us while adjudicating the appeal by the Revenue which has culminated into dismissal of its appeal. Thus, no separate adjudication is warranted on the grounds of cross objection raised by the assessee. Having dismissed the grounds of the appeal in terms of our above observations and findings, the cross objection filed by the assessee stands allowed.

7.

Now we take up the appeal filed by the Revenue in ITA No.701/Mum/2026 and the cross objection filed by the assessee in CO 116/Mum2026. Revenue has preferred an appeal challenging the relief granted by the Ld. CIT(A) regarding disallowance/addition of ₹20,65,612/-, calculated @ 0.25% on total purchases of ₹82,62,44,929/-.

8.

Brief facts as culled out from the records are that during the assessment proceedings, ld. Assessing Officer made additions/disallowances alleging that assessee was involved in non- genuine transactions and accommodation entries obtained through certain entities, including Aryav Securities Pvt. Ltd. Ld. Assessing Officer made additions under the premise that total purchases amounting to ₹82,62,44,929/- were non-genuine. Aggrieved, assessee went in appeal before the ld. CIT(A), who restricted the disallowance to 0.25% of the total alleged purchases of ₹82,62,44,929/-, resulting in a sustained disallowance of ₹20,65,612/- as commission/service charges. Revenue, being aggrieved by the relief granted by ld. CIT(A) in reducing the addition to ₹20,65,612/-, is in appeal before the Tribunal. In response, assessee filed Cross Objection, raising preliminary ground that the Revenue's appeal is non-maintainable on account of low tax effect.

9.

We have heard the parties and perused the material available on record. CBDT Circular No. 17/2019 and subsequent revisions/consolidated instructions issued mandates that no appeal shall be filed by the Revenue before the Income Tax Appellate Tribunal wherein the tax effect on the disputed additions does not exceed the monetary threshold of ₹60,000,000/- (Rupees Sixty Lakhs). On examination of the grounds raised by the Revenue, the total addition under challenge is ₹20,65,612/-. The tax effect on the disputed amount of ₹20,65,612/- is well below the prescribed threshold limit for filing an appeal before the Tribunal. Furthermore, Revenue has not demonstrated or brought on record any evidence to establish that the case falls under any of the exceptions specified in the CBDT Circulars. Since the tax effect involved in the Revenue’s appeal is below the monetary limit prescribed by CBDT instructions, Revenue's appeal itself is non-maintainable and liable to be dismissed on account of low tax effect. Consequently, the preliminary objection raised by the assessee in the Cross Objection regarding the low tax effect is allowed.

9.1. Even otherwise, present case of the assessee is covered by the above referred decision of the Coordinate Bench (supra) in his own case in ITA 3523/Mum/2024 for AY 2018-19. Relevant extracts are as under: “Abhishek Pradeepkumar Bansal 41. In various years following additions / disallowances have been challenged by the assessee:- Sr. No. AY Appeal No. Non- Commission Non- Total genuine on non- genuine Addition loss in genuine purchases illiquid trades in options illiquid options

1.

2013-14 3521/M/2024 1,52,82,150 73,665 - 1,53,55,815 2. 2015-16 3522/M/2024 1,55,50,000 1,28,875 - 1,56,78,875 3. 2018-19 3523/M/2024 - - 20,27,758 20,27,758 Total 3,08,32,150 2,02,540 20,27,758 3,30,62,448

42.

Here again, the addition has been made on account of losses and paid of currency options and futures and addition on account of adhoc commission u/s.69C. Here in this case also similar facts are permeating wherein the ld. AO has only picked up the few transactions in which assessee has incurred losses and all other similar transactions where assessee had earned profit has not been disturbed. Accordingly, our finding given in the appeal for Abans Commodities Ltd., the addition on account of non-genuine losses and commission is deleted. 43. In A.Y.2018-19, ld. AO has made addition of non-genuine purchases of rs.20,27758/- by imputing adhoc commission of 0.25%. Here also, the facts are same as applicable in the other appeals wherein purchases from two entities have been doubted on which commission rate of 0.25% has been applied. Here in this case also assessee had filed documents to prove the genuineness of the purchases like purchase invoices, warehouse receipts, delivery orders, bank statements and GST returns. Ld. AO’s allegation is based on similar lines and the reasons given by the assessee are also the same, therefore, in view of the finding given in the earlier years, adhoc addition of Rs.0.25% of non-genuine purchases are deleted. 44. In the result, appeal of the assessee is allowed.”

10.

In the result, Cross Objection filed by the assessee is allowed in terms of low tax effect and the Revenue's appeal stands dismissed as non-maintainable. Appeal of the Revenue also gets dismissed in view of the findings arrived at by the Coordinate Bench in assessee’s own case as noted above.

11.

In the result, both the appeals filed by the Revenue are dismissed and the cross objections filed by the assessee are allowed.

Order is pronounced in the open court on 17 August, 2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Dated: 17 August, 2026 MP, Sr.P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →