SHIV TRADING CO,MUMBAI vs. INCOME-TAX OFFICER - 25(1)(2)/ CURRENT JURISDICTION - INCOME-TAX OFFICER - 31(2)(1), MUMBAI, MUMBAI

This appeal by the assessee is directed against the order dated 05.03.2026 passed by the learned Additional/Joint Commissioner of Income-tax (Appeals)-1, Gurugram, under section 250 of the Income-tax Act, 1961, for the assessment year 2009-10, arising from the assessment order dated 01.09.2016 passed under section 143(3) read with section 147 of the Act.

The assessee has challenged the refusal to condone the delay, the validity of the reassessment, the addition of alleged bogus purchases of Rs.28,74,060 and the levy of interest under section 234B of the Act.

Briefly stated, the Assessing Officer received information from the Sales Tax Department that purchases aggregating to Rs.28,74,060 made by the assessee from two parties were not genuine. Since the assessee could not produce the suppliers and the notices issued under section 133(6) remained unserved, the Assessing Officer rejected the books of account under section 145(3) and added the entire purchases.

The learned CIT(A) did not condone the delay in electronic filing and consequently dismissed the appeal without deciding the grounds on merits. The assessee, however, had filed the appeal in physical form on 03.10.2016, within the prescribed time. The appeal arising from the order passed on the physical appeal was carried before the Tribunal in ITA No.5090/Mum/2026 and was dismissed on 28.07.2026 as a duplicate appeal.

We have considered the material available on record. The physical appeal having been filed within time, the assessee cannot be deprived of a decision on merits merely because the electronic appeal was filed subsequently. Ordinarily, the matter would be restored to the learned CIT(A). However, all the relevant facts are already available on record. Further, in the assessee's own case for A.Y. 2010-11, on an identical issue involving purchases from the same parties, the learned CIT(A), by order dated 08.06.2018, restricted the addition to 12.5% of the disputed purchases. The said decision has been accepted and has attained finality.

In these circumstances, remanding the matter would only prolong the litigation and give rise to another round of appeal. Therefore, in the interest of justice and to maintain consistency, we direct the Assessing Officer to restrict the addition to 12.5% of the disputed purchases of Rs.28,74,060, which works out to Rs.3,59,258, and delete the balance

In the result, the appeal filed by the assessee is partly allowed.