PANKAJ BHANWARLAL DHADDHA,MUMBAI vs. ITO WARD 19(2)(4), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER:

dated 15.09.2025 for Assessment Year (AY) 2010-11. The assessee has raised

following grounds of appeal:

“1. On the facts and circumstances of the case in law, the Ld. CIT(A) erred in upholding the reopening under section 147, which was based only on third-party information without independent application of mind by the AO.

5 On the facts and circumstances of the case in law, the Ld. CIT(A) erred in not following decision of Hon'ble ITAT in own case in respect of alleged purchases whereas 5% estimated by Hon'ble ITAT.

6 The Assessee reserves his right to amend modify delete and make any additional grounds of appeal.”

learned Authorised Representative (ld. AR) of the assessee submits that assessee

is individual and engaged in the business of reseller of metal and Nikel alloy in

the name of Kalpataru Nickel Alloys. Case of assessee was reopened on the basis

of information received from Sales Tax Department that assessee is beneficiary

of non-genuine purchases from alleged entry provider. As per information, the

assessee has purchased of Rs. 2.32 crore from suspicion / entry provider. The

Assessing Officer (AO) made addition by disallowing 12.5% of aggregate of

purchases from such alleged such suspicious dealers, despite the fact that

assessee furnished complete details to substantiate purchases. The ld. CIT(A)

upheld the action of AO. The ld. AR of the assessee submits that neither the

books of account was rejected nor sales of assessee was disputed. The sales are

not possible in absence of purchases. The ld. AR of the assessee submits that on

similar set of fact in assesses own case for A.Y. 2011-12 in ITA No. 2458/M/2023

dated 26.10.2023, similar disputed purchases were restricted to 5.00%. The ld.

AR of the assessee submits that though the purchases are genuine, yet to avoid

the long drawn litigation, the order of Tribunal in A.Y. 2011-12 (supra) may be 2 followed. The ld. AR of the assessee submits that he is not pressing other

grounds of appeal which relates to validity of reopening and deduction under

Chapter VIA.

for the Revenue submits that AO made addition on the basis of information that

assessee is beneficiary of bogus purchases. The Investigation Wing carried out

full-fledged investigation about the entry provide who is providing only

accommodation entry without actual delivery of goods. The ld. Sr. DR for the

Revenue submits that lower authorities have made reasonable disallowance and

same may be upheld.

through the orders of lower authorities carefully. We find that the AO has not

disputed the sale of assessee. The assessee is a trader in Steel and nickel items.

The sale is not possible in absence of purchases. The AO while making addition

solely relied on the information received by him. The AO has not made any

independent verification of facts. We also find that AO while making disallowance

of purchases @ 12.5% from alleged disputed parties have not rejected the books

of account of assessee. On careful perusal of assessment order, order of ld

CIT(A) and order in assesses own case in ITA No. 2458/M/2023 dated

26.10.2023 for A.Y. 2011-12 (supra), we find that issue before us is similar as of

in appeal for AY 2011-12. Therefore, considering the decision of coordinate

bench of tribunal, we direct the AO restrict the disallowance as per the decision in A.Y. 2011-12. In the result, ground No. 2 & 5 are allowed. Further, considering

the facts that the ld. AR of the assessee has is not pressed other grounds of

appeal which relates to validity of reopening and deduction under Chapter VIA,

thus, those grounds of appeal are dismissed as not pressed.

Order was pronounced in the open Court on 09/06/2026.

/- Sd/- S/- /- Sd/- MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 09/06/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By Order

Assistant Registrar / DDO ITAT, Mumbai