TISSORI INDIA FABRICS PVT LTD,MUMBAI vs. ACIT, CENTRAL CIRCLE 8(2), MUMBAI

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ITA 8897/MUM/2025Status: DisposedITAT Mumbai05 August 2026AY 2019-209 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, finding that the assessee failed to discharge its onus to prove the genuineness of transactions despite admissions and corroborating evidence. The estimation of commission income was deemed reasonable.

What were the facts?

The assessee's appeals were filed against the CIT(A)'s order confirming additions made by the AO. A search revealed the assessee was involved in providing accommodation entries by issuing bogus bills without actual supply of goods.

What were the issues?

Whether the best judgment assessment was validly made and whether the estimation of commission income on bogus transactions was justified.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 144,Section 142(1),Section 145(3),Section 271(1)(c),Section 271F,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SANDEEP GOSAIN & BIJAYANANDA PRUSETH

For Respondent: Shri Amrita Singh, CIT DR
Pronounced: 05.08.2026

Heard together (4 matters)

ITA 8897/MUM/2025
ITA 8526/MUM/2025
ITA 8650/MUM/2025
ITA 8739/MUM/2025

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

PER BENCH:

These appeals have been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-48, Mumbai, dated 13.10.2025, for the Assessment Years (AYs) 2016–17, 2017–18, 2018–19, and 2019–20.

2.

Since the issues involved in these appeals are identical and pertains to the same assessee, they were clubbed together, heard together, and are being disposed of by this consolidated order for the sake of convenience and brevity.

3.

Firstly, we shall take up ITA No. 8897/Mum/2025. The assessee has raised the following grounds of appeal:

1.

The CIT (A) erred in determining the business income of the Appellant at Rs. 39,24,850/.

2.

The CIT(A) erred in confirming the Best Judgment assessment framed u/s 153A r.w.s. 144 by the A.O. vide order dated 28.09.2021 without appreciating that the Appellant had not been provided sufficient opportunity for submitting the relevant details before the AO/ the CIT (A).

3.

The appellant craves leave to add, alter, or modify the grounds of appeal, as stated above, at any time on or before the hearing of appeal.

4.

From the case file, we noticed that on 08.04.2026 the assessee filed an application seeking adjournment. However, the same was rejected, but the matter was nevertheless adjourned to 08.06.2026. Thereafter also, the matter was adjourned from time to time, and even today nobody appeared on behalf of the assessee despite several calls. Moreover, the notice of the present date of hearing was again sent to the assessee through email as well as through Speed Post at the address provided by the assessee himself in Form No. 36 while filing the present appeal. Therefore, while drawing the presumption under the General Clauses Act and also keeping in view that the assessee had appeared through its representative on 08.04.2026 and had sought adjournments, we proceed to decide the appeal.

5.

On the other hand, the learned DR is present and ready with the arguments. Therefore, we proceed with the hearing of the case ex parte.

6.

Both the grounds raised by the assessee are interrelated and interconnected and relates to challenging the order of the learned CIT(A) in upholding the additions made by the AO, thereby determining the business income of the assessee. Therefore, we have decided to adjudicate these grounds through the present consolidated order.

7.

We have heard the learned DR and perused the material placed on record, the judgments cited before us, and also the orders passed by the Revenue Authorities. From the records, we notice that a search and seizure action under Section 132 of the Act was carried out on 06.11.2019 at the business premises of the assessee. During the said proceedings, the statements/confessions of the Director of the company, its purchase/sales parties, and other relevant persons were recorded, which established that the assessee was engaged in providing accommodation entries by issuing bogus sale/purchase bills without actual supply of goods to inflate the turnover. Considering all these facts, the additions were made by the AO as the assessee failed to discharge its onus despite sufficient opportunities having been afforded.

8.

Although the said order was challenged before the learned CIT(A), the learned CIT(A) also upheld the order passed by the AO by passing a detailed order. The operative portion of the order of the learned CIT(A) is contained in paragraphs 9.1 to 9.5.3 and the same is reproduced herein below:

9.

APPELLATE DECISION:

9.1 I have carefully considered the facts of the case, the assessment order, the grounds of appeal, and the written submissions filed by the appellant. The various grounds of appeal raised by the appellant are decided as under.

9.2 Ground No. 1: Validity of Assessment Proceedings

9.2.1. In this ground, the appellant has challenged the validity of the assessment order passed u/s 153A r.w.s. 144 of the Act, contending that it is bad in law, high-pitched, results in double taxation, and violates the principles of natural justice as no opportunity for cross- examination was provided. The appellant has cited personal hardships of its director and non-availability of data seized by the GST and Income Tax departments as reasons for its non-compliance during the assessment proceedings.

9.2.2 A search and seizure action u/s 132 was carried out on the appellant group on 06.11.2019. Consequently, notice u/s 153A was issued on 29.12.2020. The record shows that the appellant failed to file its return of income in response to this notice. Further opportunities were provided through a notice u/s 142(1) and specific show cause notices dated 11.09.2021 and 17.09.2021, proposing a best judgment assessment under section 144. The appellant did not comply with any of these notices. Section 144 of the Act explicitly empowers the Assessing Officer to make an assessment to the best of his judgment if the assessee fails to comply with the terms of a notice issued under section 142(1) or fails to file a return as required under the Act. Given the appellant's persistent and complete non- cooperation, the AO was left with no option but to complete the assessment u/s 144 based on the material available on record. The action of the AO is, therefore, legally sound and justified.

9.2.3. The appellant's contention regarding violation of principles of natural justice is also devoid of merit. The principles of natural justice cannot be invoked by a party that has chosen not to participate in the proceedings despite being given multiple opportunities. The appellant now claims it was not given an opportunity to cross-examine third parties. However, the assessment order clearly records that the director of the appellant company, ShriUrvilJani, during his statement, was explicitly given the opportunity to cross-examine Shri Rajesh Mehta, but he declined to do so. The appellant never made any request for cross-examination of any other party during the assessment proceedings. This plea is clearly an afterthought and is not tenable.

9.2.4. The appellant has further argued that the statement of its director, Shri Urvil Jani, was retracted. It is noted that the assessment order was passed on 28.09.2021. The appellant, in its submission, states that the affidavit for retraction was made on 22.10.2021, which is after the completion of the assessment. The AO has correctly recorded in the order that no retraction was filed before him during the entire duration of the assessment proceedings. Even otherwise, a statement recorded on oath during a search u/s 132(4) carries significant evidentiary value. A mere bald retraction, especially one made after the conclusion of assessment, cannot negate the evidentiary value of a detailed confession which is corroborated by a multitude of other evidence. In this case, the director's admission is strongly corroborated by the independent statements of several other individuals (Shri Rahul Jhaveri, Shri Hemendra Kapadia, Shri Rajesh Mehta etc.) who were also party to the bogus transactions, as well as the complete lack of any supporting documents to prove the genuineness of the business. The AO has correctly relied upon several judicial pronouncements, including that of the Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala 1972 CTR (SC) 253, which hold that an admission is an important piece of evidence and the burden is on the assessee to establish that the admission was wrong. The appellant has failed to discharge this burden.

9.2.5. The other contentions regarding double taxation and non-availability of data are also unsubstantiated. The addition has been made in the hands of the company for the commission income it earned. The appellant has not been able to demonstrate how this results in double taxation. The plea of non-availability of data is a general statement without any specifics. The appellant never sought specific documents from the department during the assessment proceedings.

9.2.6. In view of the above discussion, the assessment completed u/s 153A r.w.s. 144 is held to be valid in law. The grounds of appeal challenging its validity are without any basis and are therefore dismissed.

9.3 Ground No. 2: Addition of Rs. 2,73,92,883/-as Commission Income

9.3.1. In this ground, the appellant challenges the addition of Rs. 2,73,92,883/- made by the AO by estimating commission income at 5% on the total value of sales and purchase transactions, treating them as accommodation entries. The appellant argues that the addition is arbitrary, ad-hoc, and based on assumptions and retracted statements. It is also contended that the transactions are genuine as they were routed through banking channels.

9.3.2. As discussed above, the AO was justified in rejecting the books of accounts of the appellant under section 145(3) of the Act. Once the books are rejected, the AO is required to estimate the income of the assessee based on the material on record. The estimation cannot be a pure guess and must have a reasonable basis. In the present case, the evidence gathered during the search, including the confessional statements of the appellant's own director and numerous third-party entry providers, conclusively establishes that the appellant was not engaged in any genuine business of trading fabrics but was solely providing accommodation entries.

9.3.3. The income in the business of providing accommodation entries is the commission earned on the value of the transactions facilitated. The AO took the total of sales and purchases from the appellant's own profit and loss account as the quantum of bogus transactions. This basis is fair and reasonable. On this turnover of Rs. 54,78,57,677/-, the AO estimated a commission income of 5%. This rate of commission is a standard and reasonable estimate in the business of providing accommodation entries, which has been upheld in various judicial forums in similar cases. Therefore, the addition made by the AO is not ad-hoc or arbitrary but is a reasoned estimate based on the facts and evidence on record.

9.3.4. The appellant's argument that transactions through banking channels prove their genuineness is a fallacious argument. It is a common modus operandi for accommodation entry providers to use banking channels to create a trail of transactions and give them a colour of legitimacy. As held by the Hon'ble Supreme Court in the cases of CIT vs. Durga Prasad More (1971) 82 ITR 540 and SumatiDayal vs. CIT (1995) 214 ITR 801, the tax authorities are entitled to look into the surrounding circumstances to find out the reality. In this case, the reality, as admitted by the appellant's director, is that these were paper transactions without any actual supply of goods.

9.3.5. Based on the foregoing, the estimation of income by the AO is found to be justified and reasonable. The addition of Rs. 2,73,92,883/- is therefore confirmed. This ground of appeal is dismissed.

9.4. Ground No. 3: Initiation of Penalty

9.4.1. In this ground, the appellant has contested the initiation of penalty proceedings under sections 271(1)(c) and 271F of the Act.

9.4.2. It is observed that in the assessment order, the AO has only initiated penalty proceedings. No penalty has been levied by the said order. The appeal lies against an order of penalty and not against the initiation of penalty proceedings. The appellant will be provided adequate opportunity to present its case before the penalty is levied. This ground is, therefore, premature and not maintainable at this stage. Accordingly, this ground of appeal is dismissed.

9.5. Ground No. 4: Charging of Interest u/s 234A, 234B & 234C

9.5.1. The appellant has contested the levy of interest under sections 234A, 2348, and 234C of the Act.

9.5.2. The charging of interest under these sections is mandatory and consequential to the tax liability determined. It is not discretionary. Since the additions made in the assessment order have been upheld, the consequential levy of interest is also upheld. This ground of appeal is, therefore, dismissed.

9.5.3 In the result, the appeal of the appellant is dismissed.

9.

After perusal of the entire record and the orders passed by the Revenue Authorities, we find that there are explicit admissions by assessee and the concerned persons, who admitted that they had indulged in providing bogus accommodation entries by merely issuing bogus bills without actual supply of goods. In this regard, reliance is placed upon the decision of the Hon'ble Supreme Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala (1972) CTR (SC) 253, wherein it was held that an admission is an important piece of evidence and the burden is on the assessee to establish that the admission was wrong.

10.

Since the assessee has failed to discharge its onus, and no new facts, circumstances, or documents have been placed on record by the assessee to controvert or rebut the findings lawfully recorded by the learned CIT(A), we see no reason to interfere with or deviate from the findings so recorded by the learned CIT(A). Accordingly, we dismiss the grounds raised by the assessee and uphold the order of the learned CIT(A).

11.

In the result appeal filed by the assessee stands dismissed.

ITA Nos. 8526/MUM/2025, 8650/MUM/2025 and 8739/MUM/2025

12.

Since the facts and circumstances of the present appeals are similar to those involved in ITA No. 8869/Mum/2025, the findings and decision rendered in the above paragraphs shall apply mutatis mutandis to these appeals as well.

13.

In the result all the four appeals filed by the assessee stands dismissed.

Sd/- Sd/- BIJAYANANDA PRUSETH SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 05.08.2026 RY-SrPS Copy to: TISSORI INDIA FABRICS PVT LTD , 8TH FLOOR, CEEJAYPLAZA APSARA CINEMA BUILDING LAMINGTON ROAD, 1 GRAND ROAD, (EAST), MUMBAI-400021, MAHARASHTRA ACIT, CENTRAL CIRCLE 8(2), ROOM NO. 658, 6TH FLOOR, AAYAKAR 2 BHAVAN, M.K ROAD,, MUMBAI-400020, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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