SIDDHARTH STRUCTURALS ,MUMBAI vs. DCIT, CIRCLE 41(1)(1), MUMBAI

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ITA 2314/MUM/2026Status: DisposedITAT Mumbai29 June 2026AY 2009-103 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the addition was made on an estimated basis, it could not be considered a case of concealment of income or furnishing inaccurate particulars. Therefore, the penalty levied under Section 271(1)(c) was liable to be deleted.

What were the facts?

The Assessing Officer made an addition of 12.5% of alleged bogus purchases. The CIT(A) upheld this addition, and the ITAT partly allowed the appeal, restricting the addition to 10% GP. Subsequently, a penalty was levied under Section 271(1)(c) for concealment of income.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when income is estimated based on alleged bogus purchases. The applicability of the jurisdictional High Court's decision in CIT vs. Colo Colour Pvt. Ltd.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 250,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE NARENDER KUMAR CHOUDHRY & HON’BLE JAGADISH

Pronounced: 29.06.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: F BEFORE HON’BLE NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND HON’BLE JAGADISH, ACCOUNTANT MEMBER ITA 2314/MUM/2026 िनधा�रण वष�/Assessment Year: 2009-10) SIDDHARTH STRUCTURALS DCIT, CIRCLE 41(1)(1) 307, GALA COMMERCIAL KAUTILYA BHAVAN, BANDRA COMPLEX DR. DINDAYAL KURLA COMPLEX Vs. UPADHYAY MARG, MULUND MUMBAI-400051, WEST, MUMBAI-400080, MAHARASHTRA MAHARASHTRA अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of ABKFS 5656 B Assessee:

अपीलाथ� �ारा/Appellant represented Shri Shashank Mehta, by: Ld. C.A. ��थ� �ारा/Respondent represented Shri Amit Gurav, by: Ld. Sr. D.R. सुनवाई की तारीख / Date of conclusion of hearing: 18.05.2026 घोषणा की तारीख / Date of pronouncement: 29.06.2026 आदेश / ORDER

PER: NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER:

This appeal has been preferred by the Assessee against the order dated 02.12.2025, impugned herein, passed by the National Faceless Appeal Centre(NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2009-10.

ITA 2314/MUM/2026 SIDDHARTH STRUCTURALS

2.

In the instant case, the Assessing Officer (in short, “the A.O.”), vide assessment order dated 25.03.2015 passed u/s. 143(3) r.w.s. 147 of the Act, made an addition of Rs. 29,21,474/-, being 12.5% of the alleged bogus/tainted purchases, by following the judgment of the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth [(2013) 356 ITR 451 (Guj.)].

3.

The Assessee, being aggrieved, challenged the said addition by filing the first appeal before the then Ld. CIT(A)-40, Mumbai, who vide order dated 01.12.2016, upheld such addition being 12.5% of the alleged bogus purchases, made by the A.O.

4.

Thereafter, the Assessee preferred a second appeal being ITA No. 1607/M/2017 before the Hon’ble Coordinate Bench of the Tribunal, who vide order dated 05.12.2017, partly allowed the appeal restricting the addition to the extent of 10% GP instead of 12% GP on the alleged bogus purchases.

5.

Since the addition was made purely on an estimated basis, the penalty of Rs. 7,22,188/-, being 100% of the tax sought to be evaded, levied by the A.O. vide penalty order dated 26.03.2018 u/s. 271(1)(c) of the Act, and affirmed by the ld. Commissioner vide the impugned order, is liable to be deleted, particularly in view of the latest judgment of the Hon’ble Jurisdictional High Court in the case of Principal Commissioner of Income Tax vs. Colo Colour Pvt. Ltd. (2025) 178 taxmann.com 458 (Bom.), wherein the Hon’ble High Court has also held as under: -

“In this view of the matter, when the Assessing Officer proceeded to estimate the income from the bogus purchases at 12.5%, we do not find that this could be conceived to be a case of concealment of income or a case of furnishing inaccurate particulars of income by the Assessee.”

ITA 2314/MUM/2026 SIDDHARTH STRUCTURALS

6.

Thus, in view of the above findings, we do not have any hesitation in deleting the penalty levied under Section 271(1)(c) of the Act, as affirmed by the ld. Commissioner vide the impugned order. Accordingly, the penalty is deleted.

7.

In the result, Assessee’s appeal is allowed. Order pronounced in the open court on 29.06.2026.

Sd/- Sd/- JAGADISH NARENDER KUMAR CHOUDHRY ACCOUNTANT MEMBER JUDICIAL MEMBER

(Tarun Kushwaha) Sr. Private Secretary

Copy to: 1 Appellant 2 Respondent 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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