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

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ITA 703/MUM/2026Status: DisposedITAT Mumbai09 July 2026AY 2019-207 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 upheld the CIT(A)'s decision, stating that the facts were identical to previous years where the addition was deleted. Therefore, the Revenue's appeal was dismissed.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of an addition made by the AO on account of alleged non-genuine purchases. The AO had estimated a 0.25% profit on these purchases, which the CIT(A) deleted by following previous ITAT decisions in the assessee's own case for other assessment years.

What were the issues?

Whether the addition made by the AO on account of non-genuine purchases, estimated as a percentage of total purchases, was justified when the CIT(A) had deleted it based on prior ITAT rulings in the assessee's own case.

Which sections of the Income-tax Act were involved?

Section 147,Section 133A,Section 131(1A),Section 148,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J (SMC

Before: SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM

For Appellant: Shri Sanjay Singh, Shri Aditya Rai (SR. DR)
Pronounced: 09.07.2026

Heard together (2 matters)

I.T.A. No.703/Mum/2026
CO No. 111/Mum/2026

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

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. No.703/Mum/2026 (Assessment Year: 2019-20) Assistant Commissioner of Abans Metals Private Limited Income Tax, Central Circle 36, 37, 38A, Floor-3, Nariman Bhavan, 4(3), Mumbai Vs. Backbay, Reclamation, Nariman Point, Room No.424, Kautilya Bhavan, Mumbai-400021 BKC, Mumbai-400051 PAN: AAICA4779P Revenue- अपीलाथ� / Appellant Assessee-��थ�/ Respondent :

CO No. 111/Mum/2026 (Arising out of I.T.A. No. 703/Mum/2026) (Assessment Year: 2019-20) Abans Metals Private Limited Assistant Commissioner of Income 36, 37, 38A, Floor-3, Nariman Tax, Central Circle 4(3), Mumbai Vs. Bhavan, Backbay, Reclamation, Room No.424, Kautilya Bhavan, BKC, Nariman Point, Mumbai-400021 Mumbai-400051 PAN: AAICA4779P Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Sanjay Singh : Shri Aditya Rai (SR. DR) Revenue by : 16.04.2026 Date of Hearing Date of Pronouncement : 09.07.2026

O R D E R Per Bench: The captioned appeal is filed by the Revenue against the order of the Commissioner of Income Tax Appeals – 54, Mumbai [in short, “the Ld.

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited CIT(A)”], dated 27.11.2025 for the Assessment Year (AY) 2019-20, which in turn arises from the assessment order under section 147 of the Income Tax Act, 1961 [in short, “the Act”] dated 31.03.2024, passed by Assistant Commissioner of Income Tax Central Circle 4(3), Mumbai [in short, “the Ld.AO”]. The assessee has also filed the cross-objection directed against the aforesaid appeal of the Revenue.

2.

The grounds raised by the Revenue and the assessee in the appeal and cross objection respectively are as under: “Grounds raised by Revenue in appeal 1. "Whether, on the facts and in the circumstances of the case, the Ld. CIT A erred in deciding the disallowances of Rs.23,26,454/- i.e., 0.25% of total purchase amounting to Rs.93,05,81,608/- from non-genuine entities appearing in the assessee's books of accounts which is equivalent to the commission or services charges prevailing in the market for providing such accommodation entries. 2. "Whether the Ld. CIT A erred in law and in facts in not considering the binding precedent laid down by the Hon'ble Bombay High Court in the case of CIT v. Alag Securities Pvt. Ltd. (ITA No. 1512 of 2017, dated 12.06.2020), wherein it was held that commission paid to an entry provider at the rate of 0.15% was a plausible estimate, and consequently, whether the ITAT erred in not sustaining the estimation of commission expenditure at 0.25% in view of the appellant's involvement in non-genuine transactions?" 3. Whether the Ld. CIT A has erred in ignoring the judicial dictum laid down in McDowell and Co. Ltd. v. CTO [(1985) 154 ITR 148 (SC)], where it was held that colorable devices cannot form part of legitimate tax planning and such arrangements must be looked through for what they are dubious methods to avoid tax liability? 4. Whether the Ld. CIT A has erred in ignoring the judicial dictum laid down in McDowell and Co. Ltd. v. CTO [(1985) 154 ITR 148 (SC)). where it was held that colorable devices cannot form part of legitimate tax planning and such arrangements must be looked through for what they are - dubious methods to avoid tax liability? 5. Whether the Ld. CIT A has erred in law in disregarding the incriminating statement of Shri Arun Shah, Director of M/s Aryav Securities Pvt. Ltd.. recorded under section 131(1A), admitting to facilitating accommodation entries through circular trading, thereby reinforcing the non-genuineness of transactions undertaken by the assessee.

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer by ignoring overwhelming material evidence on record demonstrating that the alleged shareholders and directors lacked financial capacity, creditworthiness, and genuineness, thereby implying the transactions as non-genuine and mere accommodation entries as also found during the course of search? 7. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has grossly erred in disregarding the detailed field enquiries, third-party verifications, and on-spot inspections conducted by the Assessing Officer, which conclusively established that the directors/shareholders were persons of little means, non-filers or marginal filers of returns, had no commensurate financial strength, negligible employees, non- functional or dilapidated business premises, and were incapable of carrying on business involving such substantial turnover? 8. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the cumulative findings of the Assessing Officer, including lack of awareness of directors regarding core business activities, trading transactions, bank accounts, investments, andcounterparties, clearly established that the impugned transactions were not genuine but accommodation entries, and that the Ld. CIT(A) erred in isolating individual facts instead of examining the issue holistically, contrary to settled judicial principles?" Grounds raised by assessee in Cross Objection “1. Whether, in the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) ("CIT(A)") was justified in not recording any findings on Ground Nos. 1 and 2 which were raised by the Respondent? 2. Whether, in the facts and circumstances of the case and in law, the Ld. AO erred in reopening the assessment of the Respondent under Section 147 of the Act? 3. Whether, in the facts and circumstances of the case and in law, the Ld. AO was justified in issuing the notice under section 148 of the Act in violation of the e- Assessment of Income Escaping Assessment Scheme 2022 wherein issuance of notice under section 148 of the Act and the completion of the assessment under section 147 of the Act was to be done in a faceless manner, as it stood at the time of issuance of the reopening notice? 4. Whether, in the facts and circumstances of the case and in law, the Ld. AO was justified in initiating re-assessment proceedings under Section 147 of the Act based on information which was received almost three years prior to the issuance of the notice under Section 148 of the Act? 5. Whether, in the facts and circumstances of the case and in law, the Ld. AO was justified in initiating re-assessment proceedings under Section 147 of the Act without providing to the Respondent a copy of a valid sanction obtained under Section 151 of the Act, complete in all respects including DIN?

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited 6. Whether, in the facts and circumstances of the case and in law, the appeal filed by the Appellant-Department is liable to be dismissed on the ground of being below the monetary limits specified under Circular No. 09/2024 dated 17.09.2024 issued by the CBDT?”

3.

As per information on the Insight portal, a survey u/s 133A of the Act conducted on the Abans Group on 03.12.2019. It is found that the assessee was involved in carrying out of non-genuine activities to provide accommodation entries to various beneficiaries. Accordingly, the case of assessee was reopened u/s 147 of the Act. It is revealed that the assessee had made bogus purchase from following entities: Mavaiya Eneterprises Rs. 12,65,96,000 Yogdarshan Commercial Trading Private Limited Rs. 80,39,85,608 Total Rs. 93,05,81,608

4.

After deliberations and analysis of details and explanations of the assessee, the AO made an estimated addition of 0.25% for Rs. 23,26,454/-, on account of additional profit to the assessee on non-genuine purchases.

5.

The assessee being aggrieved, preferred an appeal before the Ld. CIT(A), who following the order of the jurisdictional ITATin assessee’s own case for AY 2018-19 and 2020-21 by, had deleted the impugned estimated addition on identical grounds.

6.

The revenue is now in appeal against the aforesaid finding of Ld. CIT(A).

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited 7. At the outset, Ld. Sr. DR strongly supported the order of Ld. AO, submitted that the AO had made a reasonable disallowance, as the assessee had obtained accommodation bills and was benefitted by certain profit from such activities. The order of Ld. CIT(A), therefore, is liable to set aside.

8.

Ld. AR representing the assessee on the other hand relied on the orders of ITAT in assessee’s own case for AY 2020-21 and AY 2018-19, which is followed by the Ld. CIT(A) and allowed the assessee’s ground of appeal.

9.

On a thoughtful consideration of the facts on records and decisions of tribunal. Since the facts of present case are identical to that of the facts in aforesaid two assessment years, for which a view is expressed by the tribunal while deciding the identical issue. The Ld. CIT(A) had followed the decision of ITAT and observed as under: “6.3 Decision: Hon'ble ITAT dealt with this issue of commission earned @0.25% of total purchases in assessee's own case for AY 2020-21 vide its order in ITA No.3520/Mum/2024, wherein the ad-hoc addition of commission income was deleted. The relevant portion of the Hon'ble ITAT's order is reproduced hereunder: Abans Metals:- 37. In the A.Y. 2020-21 following additions/ disallowances have been challenged by the assessee:- Sr. AY Appeal No. Non-genuine Total Addition No. purchases 1. 2020-21 45 45,74,595 45,74,595 Total 45,74,595 45,74,595

38.

Here in this case purchases have been made by two entities namely Manmish Traders Private Limited and Yogdarshan Commercial Trading Private Limited. In this 5

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited case also Id.AO has made adhoc percentage of commission of 0.25% from purchases made from these parties. 39. Assessee in this case also had provided similar documents proving evidence of the purchases like purchase invoices, warehouse receipts, delivery orders, bank statements demonstrating payment towards the purchases and GST returns showing receipt of the goods and availment of input tax credit on such purchases. Ld. AO had made similar allegations based on investigation report for which assessee has given details rebuttal which is by and large on the same reasons. Accordingly, in view of the finding given in the above appeals, the addition is deleted. 40. In the result, appeal of the assessee is allowed. Abhishek Pradeepkumar Bansal 41. In various years following additions / disallowances have been challenged by the assessee:- Respectfully following the decision of Hon'ble ITAT in assessee's own case the addition made on account of alleged commission income @ 0.25% of total purchases is deleted. Accordingly, the ground nos.3 and 4 are allowed.”

10.

Similar to above decision the tribunal for AY2018-19 also in ITA 3519/Mum/2024 in assessee’s own case had decided the identical issue as under: “7.As the identical issue/addition as involved in the instant case has already been dealt with by the Hon'ble Co-ordinate Bench of the Tribunal in the cases referred to above, wherein the Hon'ble Co-ordinate Bench of the Tribunal on elaborate discussion/analyzations ultimately deleted the addition and/or decided the issue in favour of those Assessees. Even otherwise there is nothing on record available to refute the findings of the Hon'ble Co-ordinate Bench of the Tribunal in Assessee's sister's concerns cases. Therefore, respectfully following the judgment referred to above, this Court is inclined to delete the addition under consideration. Thus, the addition under consideration is deleted. Resultantly the Assessee's appeal i.e. ITA No.3498/M/2024 is allowed. 8. In the result, in view of judgment in ITA No.3498/M/2024, both the appeals stands allowed.” 11. Respectfully following the aforesaid decisions of the Tribunal in assessee’s own case, we, in absence of any new fact, decision or material to dislodge the same, we are of the considered view that the ld. CIT(A) had rightly deleted the

ITA No. 703/Mum/2026 & CO No. 111/Mum/2026 Abans Metals Private Limited addition of 0.25% made by the AO, which needs no further inference. Appeal of department therefore cannot sustain, in terms of aforesaid observations, thus stands dismissed.

12.

Since the appeal of department is dismissed in terms of aforesaid deliberations, CO No. 111/ Mum/2026 of the assessee supporting the order of ld. CIT(A) has been rendered infructuous and need not be adjudicated.

13.

In result, both the appeal of Revenue as well asthe CO of assessee are dismissed, in above terms.

Order pronounced in the open court on 09-07-2026.

Sd/- Sd/- (ARUN KHODPIA) (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated : 09-07-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai

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