ABHIJEET NAHAR,SURAT vs. ITO WARD 3(2)(6), SURAT, SURAT

आयकर अपीलीय अिधकरण, सूरत �ायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.1488/SRT/2025 (Assessment Year- 2018-19) Abhijeet Nahar, ITO Ward 3(2)(6), Offaaice No.304, 3rd Floor, Income Tax Office, Gems Store Anavil Business Centre, Bhojabhai ni Sheri, Adajan Hazira Road, बनाम/ Haripura, Main Road, Adajan, Vs. Mahidhapura, Surat Surat (PAN: AHTPN9406F) (Revenue/Appellant) (Assessee/Respondent) Assessee by Shri Himanshu Gandhi, CA Revenue by Shri J.K. Chandnani, CIT (DR) Date of Hearing 21-07-2026 Date of Pronouncement 31-07-2026

ORDER Per Paresh M. Joshi, JM:

This is an Appeal filed by the Assessee u/s 253 of the Income tax Act 1961, [hereinafter referred to as the Act for the sake of brevity] as and by way of a second appeal before this Tribunal. The Assessee is aggrieved by the order bearing No:- ITBA/NFAC/S/250/2025-26/1081693063(1) dated

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13.10.2025 passed by the Ld. CIT(A) u/s 250 of the Act in the first Appeal which is hereinafter referred as the “Impugned Order”. The relevant Assessment Year is 2018- 19 and the corresponding Previous Year Period is from 01.04.2017 to 31.03.2018.

2.1 That as & by way of an Assessment Order made u/s 147 RWS 144B of the Act, the total Income of the Assessee was computed and Assessed at Rs.12,82,02,301/-. The Income declared by the Assessee was at Rs.25,07,010/-. An Addition of Rs.70,15,000/- was made by virtue of Para 4.7 as Unexplained Money u/s 69A of the Act read with Section 115BBE of the Act. Yet- Another addition was made at Rs.11,86,80,291/- by virtue of Para 4.8 as bogus purchases u/s 69C of the Act RWS 115BBE of the Act. That the aforesaid Assessment Order bears No:-ITBA/AST/S/147/2022- 23/1051527621(1) and that the same is dated 28/03/2023 which is hereinafter referred to as the “Impugned Assessment Order”.

2.2 That the Ld. AO in the “Impugned Assessment Order” has recorded as under:- “Brief facts of the case are that as per information available on 'Insight Portal', it was noted by the JAO that, during the course of investigation into the STRs in the case of Sh. Dilip Dhondu Bhuwad Prop. M/s Arham Traders, PAN: CNSPB2805D, along with other entities, it was noticed that Sh. Dilip Dhondhu Bhuwad was not doing any real business and was involved in providing accommodation entries. Sh. Dilip Dhondhu Bhuwad is reported to have made bogus transaction for providing accommodation entries to earn commission during the year under consideration. During the course of investigation by the Investigation Wing, it was found that the assessee was engaged in providing entries to various other entities who are also engaged in providing accommodation entries, and no physical transaction of goods were done.

Apart from the above, another piece of information was also found uploaded on the 'Insight Portal' by the Central

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Circle-8(4), Mumbai that the assessee has entered into transactions with M/s. Ocean International (Prop. Vishnu Kumar Sahu) in whose case, incriminating documents pertaining to this entity were found during the course of search action u/s 132 of the Income Tax Act, 1961 (in short the Act') was carried out by the Inv. Wing, Mumbai, in the case of Sh. Rakesh Javerimal Shah and others on 24.04.2019. During the course of search and post search proceedings, it was clearly established that M/s Ocean International (Prop. Sh. Vishnu Kumar Sahu) is an entity that has provided accommodation entries of loans and purchases to beneficiaries. It was also noted that the said entity has no genuine business activity and merely exists on paper, and its sole activity is to facilitate bogus transactions for beneficiaries to give legitimacy to their unaccounted income. Since the entity was found into the business of providing accommodation entries, the entries made for preparation of books of accounts are nothing but the adjustment entries to match the accommodation

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transactions. Further, the loans & advances given and purchase bills issued as shown in the accounts proved beyond doubt that the entity was engaged only in providing accommodation entries by merely issuing bogus bills in the form of sales without actual supply of goods. Similarly, the funds received by way of sale realization were also found to have been used to issue accommodation entries by way of 'loans and advances' to various beneficiaries During the course of inquiry/investigation, it has been found by the Inv. Wing, Surat, that, the assessee namely Sh. Abhijit Nahar has shown to have purchased goods from the entities who are indulged in providing accommodation entry, and there were no physical transaction of the goods. Apart from the above, as reported. you were also found one of the beneficiaries of accommodation entries of loans, by Sh. Vishnu Kumar Sahu Prop. M/s Ocean International, amounting to Rs. 70,15,000/-Accordingly, as per the information, the total of such accommodation entries provided was worked out to Rs. 12,56,95,291/- as detailed her-under:

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Sr. Name of the party Amount Remarks No. 1 Binaca Gems Pvt. Ltd. 85313711 Purchase 2 Binaca Gems Pvt. Ltd. 11471320 Purchase 3 Shamita Trading Pvt. 10423940 Purchase Ltd. 4 Tanmay Exim Pvt. Ltd. 11471320 Purchase 5 Vishnu Kumar Sahu 7015000 Loan Prop. Ocean beneficiary International Total 12,56,95,291 In view of the afore-mentioned facts, the recourse to proceedings u/s 147 of the Act was taken by the JAO, and after obtaining necessary approval of the competent authority, the notice u/s 148 of the Act was issued to the assessee on 30.03.2022 requiring the assessee to file the return of income within 30 days of the receipt of notice. In response to the afore-said notice, the assessee filed the return of income on 29.04.2022 declaring the same total income i.e. at Rs. 25,07,010/- as declared in original return of income which was filed on 25.09.2018. Subsequently, the case of the assessee was assigned to this office under the Faceless Assessment Scheme for disposal of pending assessment proceedings.”

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2.3 That the Ld. AO in the “Impugned Assessment Order” has Tabulated the Details of opportunities which is reproduced by us as below:- Type of Date of Date of Respon Date of Respon notice/comm notice/ compli se of respon se type unication commun ance the se if (Full/P ication given assesse receive art/ e d Adjour receive nment d/not receive d 148 30.03.2 29.04. Receiv 29.04. Full 022 2022 ed 2022 143(2) 20.10.2 03.11. Not NA NA 022 2022 receiv ed 142(1) 17.01.2 31.01. Receiv 04.02. Part 023 2023 ed 2023 SCN 13.03.2 17.03. Receiv 18.03. Part 023 2023 ed 2023 3. Cases where variation is not proposed: NA 4. In cases where variation is proposed:”

2.4 That the Ld AO in the “Impugned Assessment Order” has in Para 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 has recorded as under which is reproduced by us as below:- “4.1 Since, in compliance to the notice issued u/s 148 of the Act on 30.03.2022, the assessee had filed the return of

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income on 29.04.2022, hence, notice u/s 143(2) of the Act was issued to the assessee on 20.10.2022 for 3.11.2022. With this notice, the copy of reason was also appended to. However, the assessee did not make compliance to the terms of this notice. Further, a notice u/s 142(1) of the Act along-with detailed questionnaire was issued on 17.01.2023, requesting the assessee to furnish the information/explanations/documents as mentioned therein, by the stipulated date i.e. 31.01.2023. Vide this notice, the assessee was specifically requested to provide, inter alia, the copies of accounts alongwith complete address & PAN with respect to the sundry creditors, unsecured loans, debtors and advances, details of the purchases/sales made during the period under consideration, by giving Name, complete address, PAN and GST registration number of the concerned parties, details of products viz. Item No., Quantity and Weight, details of payment i.e. Date of payment, Amount, Mode of payment with supporting documentary evidence, and the amount payable at the end of the financial year. Further, the assessee was also requested to provide month

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wise details of the purchases/sales, made during the year. The assessee was also apprised of the fact that as per credible information available with this office, it has been gathered that during the period under consideration, it has entered into transactions with Sh. Dilip Dhondu Bhuwad (Prop. of Arham Traders, PAN: CNSPB2805D, who was found, by the Inv. Wing, not to carrying out any real business but was involved in providing accommodation entries. The assessee was, therefore, requested to provide complete details of the transactions entered into by it with the above-named person; and prove the identity of the person/genuineness of the transaction which should be supported with documentary evidence. It was also brought to the notice of the assessee that, as per information, it has shown purchases of goods from the following entities which were found to be indulged in providing accommodation entries and there were no physical transaction of the goods: S.No. Name of the Amount Remarks party 1 Binaca Gems 85313711 Purchase Pvt. Ltd. 2 Binaca Gems 11471320 Purchase

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Pvt. Ltd. 3 Shamita 10423940 Purchase Trading Pvt. Ltd. 4 Tanmay Exim 11471320 Purchase Pvt. Ltd. 5 Vishnu Kumar 7015000 Loan Sahu (Ocean beneficiary International) Total 12,56,95,291 The assessee was, therefore requested to provide complete details of the transactions entered into by it with the above-named persons/parties; and prove the identity of the persons/parties & genuineness of the transaction with supporting documentary evidence.

4.2 In response to the afore-said query, the assessee has uploaded a reply on 04.02.2023, the relevant part of which is extracted here-under:

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have no purchase from the said party during the period under consideration. All the transaction done with the above stated parties are absolutely genuine and recorded properly in the books of accounts and duly reported in the return of income. There is no mismatch in quantity and the same is reflected in Tax Audit Report u/s 44AB of the IT Act, 1961. Dear Sir, all our purchase and sales are duly recorded in books of account and tally carat to carat. Our quantity details are perfectly tallied with stock register. Dear Sir, from the above stated documents submitted by us it is clear that the transaction with above parties are genuine in nature and properly reflected in books of accounts".

4.3 The reply/details furnished by the assessee have been perused. On perusal of the records, it is gathered that the assessee is shown to have made the total purchases amounting to Rs. 9,67,85,031/- (8,53,13,711/- + 1,14,71,320/-), Rs. 1,04,23,940/- and to Rs. 1,14,71,320/-

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from Binaca Gems Pvt Ltd, Shamita Trading Pvt Ltd and from Tanmay Exim Pvt Ltd respectively. Further, the assessee also stated to have entered into the transaction with Sh. Vishnu Kumar Sahu Prop. Ocean International. Hence, in order to verify the issue, in question, the notices u/s 133(6) of the Act were issued to the above purported seller/parties, through the registered e-mail id available on record, requesting them to provide the below specified details:

(i) Please provide brief note on the nature of business undertaken by you during the Financial Year 2017-18 relevant to Assessment Year 2018-19, along with GST registration certificate and GST Return for the year under consideration.

(ii) Please provide complete details of transactions executed by you with the above-named assessee during the year under consideration with certified copy of ledger account maintained in your books of accounts. Please provide

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relevant part of your books of accounts where these transactions have been accounted for. Also provide detailed note on services rendered/goods sold to the assessee named above.

(iii) Please provide the copy of your return of income for AY 2018-19, copy of computation of income and audit report alongwith all annexure for the year under consideration.

(iv) Please provide statement of the relevant bank accounts for the year under consideration highlighting the transactions executed by you with the above named assessee.

(v) Please establish genuineness of the impugned transactions executed by you with the above-named assessee, during the year under consideration, by providing copy of sale/purchase orders executed along with copy of relevant bill/invoice raised, mode of delivery of items and copy of e-way bills etc.

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4.4 In response to the afore-said notices issued u/s 133(6) of the Act, Sh. Vishnu Kumar Sahu (PAN- CHFPS3445D) uploaded a reply on 18.03.2023 submitting therewith only copy of party ledger and ITR Acknowledgment. Besides, M/s Tanmay Exim Private Limited., though, has uploaded its response on 18.03.2023 claiming that it had no transaction with the said party during the year under considering (sic), but it has also not furnished complete information to substantiate its claim. The other purported sellers namely M/s Binaca Gems Pvt Ltd and M/s Shamita Trading Pvt Ltd had not, even, filed any response regarding impugned transactions made by the assessee, even till date. Even, Sh. Vishnu Kumar Sahu (PAN- CHFPS3445D) has not provided complete information, as asked for, such as the brief note on the nature of business undertaken by it during the Financial Year 2017-18 relevant to Assessment Year 2018- 19, complete details of transactions executed by it with the above-named assessee, copy of computation of income and audit report alongwith all annexure for the year under consideration and the copy of bank statement of the

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relevant bank accounts for the year under consideration etc. In the light of the afore-mentioned facts, a Show Cause Notice (SCN) was issued to the assessee on 13.03.2022 requesting to show cause as to why the addition of Rs. 12,56,95,291/-(11,86,80,291 +70,15,000) as narrated in the SCN should not be made to its income, treating the same as bogus purchases.

4.5 In response to the SCN, the assessee uploaded its reply on 18.03.2023, mainly contending therein as under:- "In our case the quantity details and movement of goods is perfectly tallied. We have sold and purchase the goods with actual delivery of goods. The goods purchase and sold by us at Arm's Length Price.

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9. Sir, all the parties mentioned in notice are assessed to Income Tax and regular in filing the ROI. All parties' books of accounts are audited and they have shown the respective transaction in their books of accounts. Therefore the same can not be considered as bogus in nature merely on the basis of forwarded information"

4.6 Before considering the claim of the assessee for having made the impugned purchases from the above purported sellers, it will be imperative to mention here that the Directorate of Investigation, Income Tax Department had conducted enquiries in the case of M/s Ocean International (Prop: Sh. Vishnu Kumar Sahu) (PAN CHFPS3445D). The relevant details of the Investigation made are as under: "Information in the case of beneficiaries of accommodation entries by M/s Ocean International (Prop: Shri Vishnu Kumar Sahu) (PAN CHFPS3445D)

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A search & seizure action u/s 132 of the Income-tax Act, 1961was carried out by the DDIT (Inv.), Unit-5(1), Mumbai, in the case of Shri Rakesh Javerimal Shah and others on 24.04.2019 at the business premises of Shri Rakesh Javerimal Shah and Shri Ankur P Doshi at 43-D, Sarvodaya Nagar, 1st Panjarpole Road, CP Tank, Mumbai -400004. During the course of search and seizure action at the above business premises, certain incriminating documents pertaining to M/s Ocean International (Prop: Shri Vishnu Kumar Sahu) having PAN CHFPS3445D were found.

During the course of search and post search proceedings, it was clearly established that M/s Ocean International (Prop: Shri Vishnu Kumar Sahu) is an entity that has provided accommodation entries of loans and purchases to beneficiaries. The entity has no genuine business activity and is merely existing on paper. Its sole activity is to facilitate bogus transactions for beneficiaries to give legitimacy to their

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unaccounted income. Since the entity is into the business of providing accommodation entries, the entries made for preparation of books of accounts are nothing but the adjustment entries to match the accommodation transactions. Moreover, the loans & advances' given and purchase bills issued as shown in the accounts proved beyond doubt that the entity was engaged only in providing accommodation entries by merely issuing bogus bills in the form of sales without actual supply of goods and booked the same in its books of accounts as sales by receiving in funds from its bank accounts or by passing journal entries. Similarly, the funds received in by way of sale realization has again been used to issue accommodation entries by way of 'loans and advances' to various beneficiaries. These bogus transactions have been used by beneficiaries to give legitimacy to their unaccounted income and siphon off their profits. By doing so, substantial income has escaped assessment which

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needs to be brought to tax. The details of the beneficiaries including their names, PANs, relevant Financial Year of transaction, and the amount of accommodation entry availed, are being shared herewith so that necessary remedial action may be taken under Section 148 of the Income Tax Act 1961 for the respective relevant assessment years". Further, it is also pertinent to mention here that the ADIT(Inv)-4, Surat has sent a report, vide No. SRT/DDIT (Inv)-4/SRT/10508335 & 10559801/DDB/2021-22 Dated 05.01.2022, regarding suspicious transaction in the case of Sh. Dilip Dhondu Bhuwad (Prop. of Arham Traders) (PAN-CNSPB2805D), the relevant part of which is extracted here-under: "3.1 DILIP DHONDU BHUWAD (PROP. OF ARHAM TRADERS): It is seen from the records available in the case of DILIP DHONDU BHUWAD (PROP. OF ARHAM TRADERS) that the subject was engaged in the business of import, export, trading of rough and

polished diamond in the name and style of M/s Arham

Traders.

4.1.1. Details of Return of income are as under:-

A.Y. Salar House Normal Capit Other GTI Total Net y Proper Busine al sourc Sales/Gro Profit Incom ty ss Other es ss e Income Income gains Incom receipts e 201 0 0 303060 0 0 30306 457840 30306 7-18 0 0 201 69669 0 309553 0 2052 38127 351953600 30955 8-19 4 8 3 201 0 0 388204 0 0 38820 125999172 38820 9-20 4 6 4 202 0 0 259921 0 0 25992 82750389 25992 0-21 1 1

3.1.2 It is seen from the details available on records that the

bank account no. 0166102000011635 was not disclosed by

the subject in its return of income for A. Y. 2018-19.

3.1.3 It is seen from the details available on record, the case

of DILIP DHONDU BHUWAD (PROP. OF ARHAM TRADERS)

was selected for Complete Scrutiny assessment under the

E- assessment Scheme, 2019 on the following issues:-

i. Business Expenses

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ii. Verification of Transactions. During the course of assessment proceeding, it was observed by the Ld. AO that the subject books sales of Rs.351,95,36,008/-against the purchases of Rs.351,89,77,414/- shown gross profit of Rs. 558594/-. It is also mentioned by the Ld. AO that the subject has no business during the entire preceding previous year. It raised the suspicion towards the trading activities of the subject. In this regard, the Ld. A.O. asked the subject to furnish the details regarding sale and purchase along-with sample bill, bank statement and sale register etc. The subject furnished the reply along-with the documents. On seeing the same, it was noticed by the Ld. A.O. that subject has made huge purchases from the following entities are as under: 1. Minisha Exim Pvt. Ltd. (AAICM7845E) 2. Mahek Exim Pvt. Ltd. (AAICM9703B) 3. Tanmay Exim Pvt. Ltd. (AABCT7354F) 4. Bhavya Impex(Dinesh MahadevDavande) (PAN:AHUPD2250J)

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It was also observed by the Ld. AO by issuing notices u/s 133(6) of the Act to the above parties and on receiving of reply of the above parties that:

"These entities are having miniscule returned income despite of making such a huge trading of precious articles and making such huge turnover in crores. The subject claimed to have purchased the diamonds from one party and sold the same in day or two to the other party. The parties are amount some of the above concerns this is apparently proved that this is a coterie of the few persons to manipulate the entire transaction to make the dubious transaction areal transaction. On perusal of bank statement of Minisha Exim Pvt. Ltd, Mahek Exim Pvt. Ltd and Tanmay Exim Pvt. Ltd, it was found that the large amount of fund in multiple entries were routed through banking channel from one to another party (among all these parties only) without actual supply of the goods. It is clear from the bank accounts of these parties that these transactions have been made for channelize the unaccounted money into the

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banking channel/books of the final beneficiaries. The above credentials of the subject and other concerns traded with the subject clearly showing that these are merely paper transaction to channelize the unaccounted money into the books of the final beneficiary for the purpose of the suppressing the profit ratio. All the multiple aspects highlighted above shows that the books of the subject are away from the actual transactions and are also fabricated to eyewash the real coterie behind the actual transactions. Hence, the same cannot be relied upon as the books of account could not shows the actual profit earned from the transaction done by the subject. The subject has no real business activity rather he was the only entry provider and made paper transaction to channelize the unaccounted money into the books of the final beneficiaries. Subject had not received or delivered any goods physically, transactions made by the subject are only paper transactions. The subject only received the commission amount on these transactions. In view of the above facts, the Ld. AO clarified that the subject has no real business activity rather he is

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the only entry provider and made paper transaction to channelize the unaccounted money into the books of the final beneficiaries. The subject had not received or delivered any goods physically, transactions made by the subject are only paper transactions. The subject only received the commission amount on these transactions."

Accordingly, the Id. A.O. rejected the books of account of the assessee under provision of section 145(3) and added 1%commission on total sales of Rs. 351,95,36,008/- which comes to Rs. 3,51,95,360/- and assessment was completed u/s 143(3) of the Act in the case of subject Dilip Dhondhu Bhuwad for A. Y. 2018-19 on 23.04.2021.

3.1.4. It is seen from the GST data available on record with the under signed that Dilip Dhondhu Bhuwad had made transaction of total sale and purchase with the following entity: Transaction Party PAN Party Name Value(Rs.) type Purchases AAICM7845E Minisha 773572564 Exim Private

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Limited Purchases AAECT7354F Tanmay 895541829 Exim Private Limited Purchases AAICM9703B Mahek 603265630 Exim Private Limited Purchases APZPJ4463Q Ashish 7481296 Kumar Jain Purchases AGMPC9846L Pushpendra 218573849 Chaplot 2498435168

3.1.5 To verify the allegation made in STR, permission has been accorded from the Additional Director of Income Tax (Inv.), Surat for open inquiry by the undersigned. Accordingly to verify the facts and collects relevant information, Summons to the subject under section 131(1A) of the Income Tax Act, 1961 was issued on dated 22.12.2021 and served upon. In response to the summons, no compliance made.

3.1.6 Inspector of this office has conducted enquiry at the address of Dilip Dhondhu Bhuwad as per latest return of income for A. Y. 2020-21 ie. 6/2147, 2nd floor, Limbusheri

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Mahidharpura, Surat and submitted his report that the address is a commercial property and found locked with sticked name board of M/s Lucro Enterprises Pvt Ltd. On enquiry from the owner of the property (99904172801), it is ascertained that Shri Dilip Dhondu Bhuvad has used his premises for only four to five days in the span of 11 Months(agreement done for only 11 months) and thereafter left the premise”.

2.5 In the “Impugned Assessment Order” the core findings of the Ld. AO were as under which is reproduced by us as below:- “4.7 From the foregoing discussion, it is apparent that during the course of search and post search proceedings, it was clearly established that M/s Ocean International (Prop: Sh. Vishnu Kumar Sahu) is an entity that has provided accommodation entries of loans and purchases to beneficiaries. This entity has no genuine business activity and merely exists on paper. Its sole activity is to facilitate bogus transactions for beneficiaries to give legitimacy to

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their unaccounted income. As stated before, notice u/s 133(6) of the Act was issued to M/s Ocean International (Prop: Sh. Vishnu Kumar Sahu) to provide the details such as brief note on the nature of business undertaken by him during the Financial Year 2017-18 relevant to Assessment Year 2018-19, along with GST registration certificate and GST Return for the year under consideration; Complete details of transactions executed by him with the above- named assessee during the year under consideration with certified copy of ledger account maintained in your books of accounts, Relevant part of the books of accounts where these transactions have been accounted for, Copy of the return of income for AY 2018-19 along-with copy of computation of income and audit report with all annexure for the year under consideration, Copy of statement of the relevant bank accounts for the year under consideration highlighting the transactions executed with the above named assessee, and to establish the genuineness of the impugned transactions executed by him with the above- named assessee, during the year under consideration, by

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providing copy of sale/purchase orders executed along with copy of relevant bill/invoice raised, mode of delivery of items and copy of e-way bills etc. However, no such information has been provided despite having asked specifically in this regard. Hence, in view of the foregoing discussion, it may be inferred that the assessee is a beneficiaries of accommodation entries of loans amounting to Rs. 70,15,000/- from Sh. Vishnu Kumar Sahu (Ocean International). Accordingly, an addition of Rs. 70,15,000/- is hereby made in the income of the assessee being unexplained money u/s 69A of the Act, chargeable to tax u/s 115BBE of the Act. I am satisfied that the assessee has concealed his income to the tune of Rs.70,15,000/-. Since, the income determined includes income referred to in section 69A, penalty proceedings u/s 271AAC(1) of the Income Tax Act, 1961 is being initiated separately. (Addition: Rs. 70,15,000/-) 4.8 Further, on perusal of the report of the ADIT (Inv)-4, Surat (supra), it has also been established that Sh. Dilip Dhondu Bhuwad (Prop. of Arham Traders) (PAN-

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CNSPB2805D), has no real business activity rather he was the only entry provider and made paper transaction to channelize the unaccounted money into the books of the final beneficiaries. He had not received or delivered any goods physically, and the transactions made by him are only paper transactions. He has only received the commission amount on these transactions".

As stated before, the assessee has furnished a reply on 18.03.2023 in response to the SCN issued by this office. The reply vis-à-vis details provided by the assessee have been considered with reference to the other materials available on record. Vide impugned reply; the assessee has mainly contended that in his case, the quantity details and movement of goods is perfectly tallied. Further, it has also been contended that he had sold and purchased the goods with actual delivery of goods. The assessee has also contended that all the parties mentioned in notice are assessed to Income Tax, are regular in filing the ROI, and all parties' books of accounts are audited and they have shown

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the respective transaction in their books of accounts; and therefore the same cannot be considered as bogus in nature merely on the basis of forwarded information. Here, it would be pertinent to mention that by merely claiming that all the parties mentioned in notice are assessed to Income Tax, are regular in filing the ROI, and all parties' books of accounts are audited and they have shown the respective transaction in their books of accounts does not ipso facto prove that the impugned transaction is genuine. The contention of the assessee that in his case, the quantity details and movement of goods is perfectly tallied is also not acceptable as it is not the sole criteria to prove the genuineness of the transaction. From the foregoing description, it is apparent that the assessee has failed to prove the genuineness of the impugned transactions, with the above-named concerns, with supporting documentary evidence. It would not be out of place to mention here that notices u/s 133(6) of the Act were issued to all the alleged transacting parties, but either they have not provided, at all, the information as asked or have provided the information in part.

In view of the foregoing discussion, it may therefore be concluded that the assessee has been unable to offer any satisfactory explanation with supporting evidence to show and establish that the impugned transaction are genuine. The assessee has also failed to counter the facts and the arguments, forming the basis of the reopening of the case, made against it challenging the genuineness of such transaction. In view of the above narrated facts, the impugned purchases of Rs. 11,86,80,291/- claimed to have been made by the assessee from the above-mentioned parties are treated to be as bogus. Hence, the amount of Rs.11,86,80,291/- is added accordingly u/s 69C of the Act, to the total income of the assessee for the period under consideration, chargeable to tax u/s 115BBE of the Act. I am satisfied that the assessee has concealed his income to the tune of Rs. 11,86,80,291/-. Since, the income determined includes income referred to in section 69C, penalty proceedings u/s 271AAC(1) of the Income Tax Act, 1961 is being initiated separately. (Addition: Rs.11,86,80,291/-) It is pertinent to mention here that a Show Cause Notice (SCN) was issued to the assessee on 13.03.2023 requiring to show cause as to why the proposed variation should not be made and the assessment should not be completed accordingly. In response to the aforesaid SCN, the assessee has furnished a reply on 18.03.2023 which has duly been considered. Further, it may also be added here that the assessee has not sought the personal hearing by clicking the Seek Video Conferencing Button available against the SCN, by the given date i.e. 17.03.2023.” 2.6 That the Assessee being Aggrieved by the aforesaid “Impugned Assessment Order” Prefers the First Appeal u/s 246A of the Act, before the Ld. CIT (A) who by the “Impugned order” has dismissed the first Appeal of the Assessee on the Grounds & Reasons specified therein. The Core Grounds & the Reasons are as under:-

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6. After filing the present appeal, the case was fixed for hearing vide notice u/s 250 of I.T. Act which were issued on 23.07.2025, 07.08.2025 & 21.08.2025 However, there has been no response from the appellant to the said notices The details of the opportunities granted are reproduced below. After considering the evidences on record, the grounds of appeals are decided in this order. Sr.No. Date of notice Date of Hearing Remarks issued u/s 250 Fixed 1. 23.07.2025 01.08.2025 No reply received till date No reply received till date 2. 07.08.2025 14.08.2025 No reply received till date 3. 21.08.2025 29.08.2025

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not been able to rebut the finding of the Ld. Assessing Officer with cogent evidences. 7.2 It is relevant to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim "Vigilantibus non dormientibusjurasubveniunt." It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. 7.4.5 In fact, despite many notices as enumerated above, the appellant has failed to file any response whatsoever. It is settled law that where the assessee fails to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the additions back into the income of the assessee as held in Kale Khan Mohammad Hanif v CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT[1977] 107 ITR 938 (SC). Therefore the grounds hold no merit and are dismissed in toto. 7.5 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the

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Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014]and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the addition made by the AO is sustained in terms of the observations herein-above.

2.7 That the Assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & Interalia has raised the following Grounds of Appeal in the Form No.-36 before us which are as under:- “1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in passing ex-parte order without providing fair opportunity of being heard to the appellant.

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2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the action of Ld. AO of initiating reassessment proceeding under section 147 of Income Tax Act. 1961 which is bad in law and require to be quashed. 3. On the facts and circumstances of the case and in law, the Ld CIT(A) erred in confirming the action of Ld AO of initiating reassessment proceedings under section 147 of the Income Tax Act, 1961 on wrong facts and thus the entire proceedings are bad in law and required to be quashed. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of Ld AO in making addition of Rs. 9,67.85,031/- as suspicious purchases under section 69C despite of the fact that the amount is actually sales to M/s Binaca Gems Pvt Ltd and the same was already reported in books of accounts and offered to tax and thus the addition made by treating the genuine sales as bogus purchases under section 69C is unjustified and required to be deleted.

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5. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of Ld AO in making addition of Rs. 1,04,23.940/- as suspicious purchases under section 69C despite of the fact that the amount is actually sales to M/s Shamita Trading Pvt Ltd and the same was already reported in books of accounts and offered to tax and thus the addition made by treating the genuine sales as bogus purchases under section 69C is unjustified and required to be deleted. 6. On the facts and circumstances of the case and in law, the Ld -CIT(A) failed to appreciate the fact that section 69C is not applicable on sales as the same is not an expenditure. 7. Without Prejudice to Ground No 4 to 6, On the facts and circumstances of the case and law, the Ld CIT(A) failed to consider that no addition under section 69C as bogus purchases can be made on account of Sales made to M/s Binaca Gems Pvt Ltd and M/s Shamita Trading Pvt Ltd when the same is already credited to profit and loss account, offered to tax and any such additions would lead to double taxation.

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8. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of Ld AO in making addition of Rs. 1,14,71,320/- as suspicious purchases from M/s Tanmay Exim Pvt Ltd under section 69C despite of the fact that there was no transaction of what so ever nature with M/s Tanmay Exim Pvt Ltd and the facts were confirmed through response filed u/s 133(6) of the Act by M/s Tanmay Exim Pvt Ltd and thus the addition made by treating it as bogus purchases under section 69C is unjustified and required to be deleted specially when no such expenditure was claimed. 9. On the facts and circumstances of the case and in law, the L.d. CIT(A) erred in confirming the action of Ld AO in making addition of Rs. 70,15,000/- as unexplained money u/s 69A despite of the fact that the appellant has only purchase transactions of Polished diamond from M/s Ocean International amounting to Rs. 1,30,000/- and thus the addition made by treating it as unexplained money under section 69A is unjustified and required to be deleted.

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10. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the action of Ld AO in initiating the penalty proceedings u/s 271AAC(1) of Income Tax Act, 1961. 011 On the facts and circumstances of the case and law, the Ld CIT CIT(A) erred in confirming the action of Ld AO in charging interest under section 234B and 234C of the Income Tax Act, 1961 11. Appellant craves leave to add further grounds OR to amend OR alter the existing grounds of appeal on OR before the date of hearing.”

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recorded a wrong finding as Vishnu Kumar Sahu, Proprietor of M/s. Ocean International in response to notice u/s 133(6) of the Act had uploaded a reply on 18/3/2023 & had submitted a copy of Party Ledger & ITR Acknowledgement & it was incumbent upon the Ld. AO to have considered the same but the same was not considered. In so far as addition of Rs.1,86,80,231/- is concerned it was submitted that allegations of bogus purchases are wrong & incorrect. Reply of the Assessee in this regard on 18/3/2023 has not been appreciated correctly. Ld. AO has made addition basis 4 parties out of which with 3 parties the Assessee had No business Relations. It was submitted that action of the Dept. by virtue of invocation of Section 148 of the Act was challenged before Ld. CIT(A) as ground No.2 in Form 35 & Ld. CIT(A) in the “Impugned Order” has not given any cogent Reasons in this regard. It was finally prayed that All issues be reexamined by the Ld. CIT(A) afresh including legal issue on Reopening & a well Reasoned order be issued by the Ld. CIT(A) in this regard on all issues. The Ld. CIT(A)’s “Impugned Order” is not meritorious in nature & is an ex-parte order in

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violation of the Principles of Natural Justice. Per contra the Ld. DR appearing for & on behalf of the Revenue submitted that while the Impugned Assessment order” is a Bi-partite one but the “Impugned order” is not on Merit & Revenue has no objection if the Matter is Remanded back to the file of the Ld. CIT(A) so as to enable him to dispose of the case basis Merits provided the Assessee puts in & shows their appearance before the Ld. CIT(A). In Rejoinder the Ld. AR undertook before us that the Assessee would cooperate with the Dept. & before the Ld CIT(A). Appearances & Notice(s) would be complied with. Hearing was over & concluded.

Observations, Findings & Conclusions:- 4. 4.1 We now have to decide the legality, validity and the proprietary of the “Impugned Order” basis records of the case & the rival submissions canvassed before us.

4.2 We have carefully perused the records of the case and have heard the submissions.

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4.3 We, after carefully perusing the Records of the case & after hearing & further after examining the Rival Contentions of the parties canvassed before us, are of the considered view that the “Impugned order” is not meritorious as Income of the Assessee is required to be computed & Assessed on Real time basis both at original stage as well as at first Appellate stage. The powers of the Ld. CIT(A) are Co-terminus with that of a Ld. AO. The Deficiencies if any at original stage are Rectifiable at the first appellate stage. The Ld. CIT(A) can step into the shoes of the Ld. AO & can adjudicate the matter basis merits too. However, unfortunately Meritorious order could not be passed on many grounds in the Present case including Non-Compliance attitude of the Assessee in attending to the hearings as & when they were fixed. Under these facts & circumstances we find prayer of the Remand back to the file of the Ld. CIT(A) with No opposition by the Ld. DR to be a fair & Reasonable one. Accordingly, we Set Aside the “Impugned order” & Remand the case back to the file of the Ld. CIT(A) on DeNovo basis, with a direction to him to pass a Meritorious Order on all the issues & simultaneously we direct the Assessee to

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participate in an effective manner so that first appeal can be disposed of as expeditiously as possible. 4.4 In the premises drawn up by us we Set Aside the “Impugned Order” as & by way of Remand back to the file of the Ld. CIT(A) with above directions.

5.2 The appeal of the Assessee is allowed for statistical purpose. Order pronounced as per Rule 34 of I.T.A.T. Rules 1963 on 31.07.2026 by placing on Notice Board.

Sd/- Sd/- (B.M. BIYANI) (PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER िदनांक /Dated : 31.07.2026 * Kishore, Sr. P.S.

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Copy of the Order forwarded to:

By Order,

Sr. Private Secretary, I.T.A.T., Surat

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