SAMEX OVERSEAS,DUMAS ROAD vs. CRICLE 2(1)(1), MAJURAGATE

ITA 440/SRT/2026Status: DisposedITAT Rajkot23 September 2026AY 2019-204 pages
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What did the Tribunal hold?

The Tribunal noted that the assessee had provided details of tax invoices, payment, and ledger account entries, as well as GST paid. The department had accepted the corresponding sales. While the supplier was declared untraceable, the Tribunal found it appropriate to accept the assessee's alternate plea. The Tribunal directed the AO to estimate a 6% profit on the purchase amount, which it found to be Rs. 1,88,800/- based on the records, rather than the Rs. 2,66,000/- initially added. The reasoning was that given the evidence of purchase and payment, and the acceptance of sales, a profit estimation was more equitable than a full disallowance, especially when the supplier was untraceable. The ratio decidendi is that where purchases are evidenced by invoices and payments, but the supplier is untraceable, a profit estimation at a reasonable rate (e.g., 6%) is a valid approach, as per High Court precedents, instead of a full disallowance under Section 69C.

What were the facts?

The assessee, Samex Overseas, filed an appeal against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC) dated January 22, 2026, for Assessment Year 2019-20. The assessee had declared a total income of Rs. 9,68,879. Following a notice under Section 148, the Assessing Officer (AO) made an addition of Rs. 2,66,000 under Section 69C as unexplained expenditure, treating purchases as bogus. The CIT(A) dismissed the assessee's appeal, confirming the AO's order. The assessee contended that documentary evidence, including tax invoices, bank payments, and GST details, was provided to both the AO and CIT(A). The assessee also argued that Section 69C was not applicable and, in the alternative, sought profit estimation at 6% based on a Gujarat High Court decision. The revenue argued that the supplier was untraceable and the assessee provided insufficient details.

What were the issues?

1. Whether the addition of Rs. 2,66,000/- as unexplained expenditure under Section 69C of the Income Tax Act, 1961, is justified, considering the documentary evidence provided by the assessee. Assessee's contentions: The assessee argued that it had submitted documentary evidence, including tax invoices, bank payments, books of accounts, and GST returns, to both the AO and CIT(A). It contended that the AO had not invoked the proper provisions of the Act as the case did not fall under Section 69C. The assessee also pointed to specific ledger account details and bank payments in the paper book. In the alternative, the assessee relied on the Gujarat High Court decision in Surya Impex to argue for a 6% profit estimation if the addition were sustained. Revenue's contentions: The revenue argued that the supplier from whom the assessee purchased goods was not traceable and that the assessee had failed to provide adequate details to the AO and CIT(A). The revenue relied on the assessment order, the CIT(A)'s order, and the Bombay High Court decision in PCIT v. Kanak Impex (India) Ltd.

Which sections of the Income-tax Act were involved?

Section 69C,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Respondent: Shri Ashish Kumar, Sr. DR
Pronounced: 23.09.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [in short “CIT(A)”] dated 22.01.2026 for the Assessment Year (in short “AY”) 2019-20. 2. The assessee has raised the following grounds of appeal: “1.On the facts and circumstances of the case, the learned CIT(A) has wrongly confirmed the addition u/s 69C of 2,66,000/-. 2.The ID CIT(A) should have considered the submissions & evidences made before the

The order continues below.

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