DCIT, MUMBAI vs. BHAGWANA RAM BISHNOI, MUMBAI

KANT, AM ppeals by the assessee and th rder dated 04.03.2025 passe come-tax (Appeals) – National F ort ‘the Ld. CIT(A)’] for assessm raised by the assessee in :
ts and circumstances of the case in law confirming reopening of the case which is ts and circumstances of the case in law confirming addition of Rs 4,46,933/- o us Purchases raised by the Revenue in :
her on the facts and circumstances of th d. CIT(A) is right in restricting the additio otal bogus purchase as against addition of bogus purchases even when L.d. CIT(A he conclusion drawn by AQ that the purc ogus
Whether on the facts and circumstances of , Ld. CIT(A) is right in restricting the add total bogus purchase as against addition of bogus purchases without establishing purchase to GP% of business. More so o fact on record available to support 12.5%
her on the faets and in the eircumstance n law, the order of the td. CJ I(A) is pe ering that Hon'ble Apex Count dismissed
Bhagwana Ram Bishnoi
2
815 & 3903/MUM/2025
he Revenue are ed by the Ld.
Faceless Appeal ment year 2012- its appeal are the Ld CIT(A) bad in Law.
the Ld CIT(A) on account of its appeal are he case and in on to 12.5% of n by the A0 of A) itself agreed chases were in f the case and dition to 12.5%
n by the AO of g relevance of o, when there
% addition ?"*
es of the case erverse in not d SL.P filed by assess reversi
NK. Pr purcha
Gujara already order?
4. "Wheth and in conside percen in book whose
5. "Wheth and in the de which probab bankin bogus p
6. " Whet and in the lat this iss bogus p
3. Briefly stated, t its return of incom
₹5,95,292/-. The sa
143(1) of the Income
Act’). Subsequently,
Director General of assessee had obtain hawala bills, aggrega
Pvt. Ltd. during the assessment year un information, the Asse
ITA No. 18

see agamst the order of flon'ble fligh Co ing the order of Ld. CIT(A), Ahmadabad rotein Ltd, which is on the similar is ases and that this order of the Hon'ble at disallowing 100% of the bogus pu y law of the land when the I.d. CTI(A) p
"
her of the facts and in the eircumstance n Jaw, the order of L.d. CTICA) is ering that this was not a case of ntage of gross profit but of an unexplaine ks which was incurred Reuting laws of nature was non-genuine since its very in her on the facts and in the circumstance law, the order of L.d. CIT(A) is right in n cision of Hon'ble Apex court in case of Jaid the principle of preponderane bilities and also not considering tha ng audit-unil can he castly created in s purchases?"*
ther on the facts and in the eircumstance law, the order of Ld. CIT(A) is right in n test decision of Hon'ble Apex Bombay H sue in case of Kanak Impex that additi purchase can be made in such cases?"*
the facts of the case are that th me on 29.09.2012 declaring t aid return was duly processed e-tax Act, 1961 (hereinafter ref information was received from Income-tax (Investigation), Mu ned accommodation entries, in ating to ₹35,75,460/- from M/s e relevant financial year corres nder consideration. Based on essing Officer recorded reasons
Bhagwana Ram Bishnoi
3
815 & 3903/MUM/2025
urt of Gujarat in the case of sue of bogus
High Court of urchases was pronounced its es of the case right in not estimation of ed expenditure f the land and nception?"
es of the case not considering
Sumati Dayal ee of human at paper and such cases of es of the case not considering
High Court on ion a 100% of *
he assessee filed total income of d under section ferred to as ‘the the office of the umbai, that the n the nature of s. Sundha Steel sponding to the n such credible s to believe that income chargeable to issued notice under was duly served upon 3.1 It is a matter of in response to the statutory notices
05.09.2019, 16.09.2
served. During the re also caused a notice
M/s. Sundha Steel assessee. However, authorities as unserv said concern. The fa was duly communica was issued calling purchases should no 3.2 In response, th of the purchases.
Assessing
Officer unsatisfactory. The following findings:
“3.6 The subm the materials and considere emerge
ITA No. 18

o tax had escaped assessment, section 148 of the Act on 30. n the assessee.
record that the assessee did no notice issued under section 1
under section 142(1) date
2019 and 30.09.2019 were is eassessment proceedings, the A under section 133(6) of the Act
Pvt. Ltd. at the address fur the notice was returned ved, thereby indicating the non- actum of non-existence of the a ated to the assessee and a sho upon the assessee to explain t be treated as non-genuine.
e assessee filed certain docum
However, upon examination found the same to be in Assessing Officer, inter alia mission / details furnished by the asses s available on record have been careful ed. From the above discussions, the follo
Bhagwana Ram Bishnoi
4
815 & 3903/MUM/2025
and accordingly
03.2019, which ot file any return
148. Thereafter, ed
26.08.2019, ssued and duly
Assessing Officer t to be issued to rnished by the by the postal
-existence of the alleged supplier ow cause notice n why the said ments in support n thereof, the nsufficient and a, recorded the see as also lly perused wings facts

(i) The Sale Ta in each of the these parties accommodatio delivering any (ii) Independe by this office confronted wi modus opera expenses incl entries from s
(iii) The asses dealers' for ex in the books extent made f and hence I a the assessee purchases ar profits to be public in gene
(iv) The asse delivery chall
Octroi duty, r gate pass, godown/ware placed on rec to have purch that they req transportation
The onus was purchases ma
(vi) Mere filing through accou where genuin account payee
(vii) The Sales are 'non ge enquiries. It is to controvert no efforts to p
ITA No. 18

ax Department has conducted independe e 'non genuine' parties and conclusively p s are engaged in the business of on entries only. The parties are issuing b y goods and services.
ent enquiries / investigations have been under the I.T. Act and the assessee has ith the same. Evidently, the assessee had andi to reduce his true profits by in luding purchase expenses by taking acco such parties.
ssee was asked to produce the said 'n xamination, but the assessee failed to d of accounts of the assessee, the purcha from the above said parties remained u arrive at a conclusion that the purchases in the books of accounts are inflated re debited to trading account to suppre disclosed to the department in specific eral.
essee could not file the vital documen lans, transport receipts, octroi receipt for receipt of weighbridge for weighing of go goods inward register maint ehouse/storage house etc. Whatever cord is not capable of sustenance. The ite hased from the said parties are of such quire separate transportation. Hence th n is not explained properly.
s upon the assessee to establish the gen ade by the assessce. (v) g of evidences in support of purchases an unt payee cheque cannot be conclusive neness of transaction is in doubt. Pa e cheques are not sacrosanct.
s Tax Department certified that the afores enuine operators' after conducting in s evident that the assessee did not make the finding recorded by the DGIT (Inv.) a produce the seller parties.
Bhagwana Ram Bishnoi
5
815 & 3903/MUM/2025
ent enquires proved that f providing bills without carried out s been duly d adopted a nflating his ommodation non genuine do so. Thus, ases to the unverifiable s shown by and bogus ss the true and to the ts such as payment of oods, excise tained at documents ems shown h in nature he mode of uineness of nd payment e in a case
Payment by said parties ndependent e any effort and it made

(viii) If all the were supplie assessee tha
Thus, from th the purchases claimed as de
3.3 On the basis o concluded that the p
Sundha Steel Pvt. Lt dated 23.12.2019 pa
147 of the Act, dis
₹35,75,460/-.
4. In appeal, the l
[‘CIT(A)’], following th case for assessment y embedded in such no and accordingly rest purchases. The relev under:
“8. I have con
1, the assess
AO received assessee rece from one of t paper entity providers to t the beneficiar investigation indicated tha issued notice received and mind indepen
ITA No. 18

e evidences point to the fact that no ac ed by the above parties, then the ar at it purchased goods in good faith is n he above analysis of the facts, it is crysta s made by the assessee from the above p ebit in his profit and loss account are not f the aforesaid analysis, the A purchases claimed by the asse td. were not genuine and accor assed under section 143(3) rea sallowed the same and made learned Commissioner of Incom he decision of his predecessor in year 2011-12, held that only th on-genuine purchases could be tricted the addition to 12.5% o vant finding of the Ld. CIT(A) is nsidered the submissions of the assessee see challenged the re-opening of the ass information from the investigation w eived accommodation entry in the form the entities of M/s Sunda Steels Pvt Lt which provided bogus entry/accom the tune of Rs 35,75,460/- Since assesse ries of such accommodation entry and th of another enforcement department at income has escaped assessment, th e u/s 148 after duly considering th recorded his reasons for re-opening by ndently. The fresh material/information
Bhagwana Ram Bishnoi
6
815 & 3903/MUM/2025
ctual goods rgument of not tenable.
al clear that parties and t genuine.”
Assessing Officer essee from M/s.
dingly, by order ad with section an addition of me-tax (Appeals) n assessee’s own he profit element brought to tax, of the impugned s reproduced as e. In ground no sessment. The wing that the of purchases td, which is a modation bill ee was one of he outcome of prima facie he AO rightly e information y applying his received was sufficient to re years from t assessee's ple was not fulfil is dismissed.
As regards t
53/IT-200/IT addition adop the assessee order, I dir of the purcha
5. Aggrieved with t and the Revenue are grounds as reproduc relief granted to the a sustaining of the add
6. We have heard the relevant material assessee’s own case
2011-12, purchases
Pvt. Ltd., were held restricted to 12.5% o
Ld. CIT(A) is reprodu
“4.5. Even purchased for parties. By p have benefitt circumstances officer has co can take care
Considering
ITA No. 18

e-open the case for AY 2012- 13 which w the end of assessment year. In view ea that the conditions for re-opening of th lled is rejected and ground no. 1 filed by the merits of the case, the CIT(A) vide
TO- 19(1)(2)/2017-18 dated 02.01.2028
pting 12.5% of the value of the transactio
's case for AY 2011-12. Following the s rect the AO to restrict the additio ases.”
the finding of the Ld. CIT(A), bo in appeal before the Tribunal b ced above. The Revenue is agg assessee whereas assessee is ag dition @ 12.5% of the bogus purc rival submissions of the parti ls on record. It is an undispu e for earlier assessment years, from the same party i.e., M/s to be non-genuine, and the di of such purchases. The relevan ced as under:
if materials have been purchased, t rm these parties and may be in cash from urchasing from the grey market, the app ted by the savings of taxes. Therefore s of the case, in this particular case, nsidered most appropriate to adopt 12.5
e of the rotation of capital utilised for suc non-compliance on the part of appe
Bhagwana Ram Bishnoi
7
815 & 3903/MUM/2025
was within six w of this, the he assessment y the assessee order CIT(A)- confirmed the on as profit in said appellate on to 12.5%
oth the assessee by way of raising grieved with the ggrieved with the chase entries.
ies and perused uted fact that in , including A.Y.
s. Sundha Steel isallowance was nt finding of the they are not m un-disclosed ppellant would e, in fact and the assessing
% profit which ch transaction.
ellant in the assessment unreasonable
6.1 The Ld. counse assessment year 2
restricted the disallow party M/s Sundha S the said consistent vi
6.2 The principle o
Supreme Court in Ra
(SC) and further exp of India [2006] 282
Bombay High Court
Ltd. [2018] 96 taxm absence of any chan ought not to be taken
6.3 The ld Counsel circumstances, follow addition cannot be s consideration. He re
Bench and submitted
5% of the bogus purc
6.4 In the present c involved are identical of consistency and th
ITA No. 18

proceedings, this cannot be consid e. Thus the Grounds of Appeal are dismi el further referred to the assess
2009-10 where, also the As wance to 12.5% of the purchase
Steel Pvt. Ltd. The learned CIT( iew.
of consistency, as laid down adhasoami Satsang v. CIT [199
lained in Bharat Sanchar Nigam
ITR 273 (SC), as also applied in Pr. CIT v. Quest Investme mann.com 157 (Bom), mandat nge in material facts or law, a n for subsequent years.
l submitted that in absence of wing the principle of consiste sustained up to 100% during eferred to the various order of d that disallowance should be r chases.
case, the factual matrix as wel l to earlier years. Respectfully fo he judicial precedents, we hold
Bhagwana Ram Bishnoi
8
815 & 3903/MUM/2025
dered to be ssed.”
sment order for ssessing Officer es from the said
(A) has followed by the Hon’ble
92] 193 ITR 321
m Ltd. v. Union by the Hon’ble nt Advisors (P.) tes that in the a different view f any change in ency, assessee’s the year under the Co-ordinate restricted to the ll as the parties ollowing the rule that the action of the CIT(A) in re impugned purchases interfere with the sam
5. Accordingly, the a dismissed.
Order pronoun (SANDEEP G
JUDICIAL M
Mumbai;
Dated: 26/08/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ITA No. 18

estricting the disallowance to s is fair and reasonable. We se me.
appeals of the assessee as well ced in the open Court on 26/0
/-
S
GOSAIN)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Bhagwana Ram Bishnoi
9
815 & 3903/MUM/2025
12.5% of the ee no reason to as Revenue are 08/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai