FANCY DIAMONDS INDIA PRIVATE LIMITED,MUMBAI vs. DCIT, CIRCLE 5(1)(1), MUMBAI, MUMBAI

ITA 6845/MUM/2025Status: DisposedITAT Mumbai29 June 2026AY 2010-116 pages
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What were the facts?

The Assessing Officer (AO) made an addition for alleged bogus purchases. The ITAT directed the AO to restrict the addition to the difference in GP rate between bogus and genuine purchases. However, the AO and CIT(A) misinterpreted this direction, leading to an incorrect calculation of the addition.

What did the Tribunal hold?

The Tribunal held that the AO and CIT(A) had misinterpreted the ITAT's directions. The addition should only be made to the extent of the difference in GP rate where the GP rate on bogus purchases was lower than that on genuine purchases.

What were the issues?

Whether the AO and CIT(A) correctly interpreted and applied the ITAT's directions regarding the calculation of addition on bogus purchases based on GP rates. Whether consequential grounds of appeal related to penalty and interest are premature.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 271,Section 234

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI ANIKESH BANERJEE, JM & SHRI ARUN KHODPIA, AM

Hearing: 29.06.2026

Heard together (2 matters)

I.T.A. No.6845/Mum/2025
I.T.A. No. 7045/Mum/2025

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

Per Arun Khodpia, AM: The two captioned appealsare preferred by the Assessee and the Revenue respectively, to challenge theorder of the Commissioner of Income Tax A

The order continues below.

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