DCIT CC-7(2), MUMBAI, MUMBAI vs. MAN INDUSTRIES (I) LTD., MUMBAI

PER OM PRAKASH KANT, AM

These two appeals by the Revenue are directed against two separate orders, both dated 29/11/2024, passed by the Ld.
Commissioner of Income-tax (Appeals) – 49, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2012-13 and 2015-16 respectively.
As both the appeals being connected with one assessee, same were heard together and d for the sake of conven
2. Firstly, we take
617/Mum/2025 for in the appeal are repr
1. "Whether o law, the Ld
Rs.2,60,61,00
Act, without a 2. Whether on law, the Ld.
appellant at determined by appreciating t
3. The order o of the case a the AO be re
3. Briefly stated fa was engaged in the b diameter carbon stee applications. The as on 29.09.2012 declar was subsequently rev
Rs.148,93,31,110/-.
Income-tax Act, 19
28.12.2017 assessin
Subsequently, inform of the Income-tax
ITA Nos disposed off by way of this con nience.
e up the appeal of the Revenue assessment year 2012-13. The roduced as under:
on the facts and circumstances of the cas d. CIT (A) erred in deleting the add
06/- as unexplained cash credit u/s 6
appreciating the facts of the case.
n the facts and circumstances of the cas
CIT(A) erred in allowing the total incom
Rs. 1,55,13,50,398/- as against the y the AO of Rs. 1,57,74,11,400, without the facts of the case.
of the Ld. CIT(A) is erroneous in law and and is liable to be set aside and the estored?
acts of the case are that the ass business of manufacturing and el line pipes for various high pre ssessee filed its return of incom ring total income at Rs.154,94, vised on 30.12.2013, declaring
The assessment u/s 143(3) r.w
961 (in short ‘the Act’) was ng the total income at Rs.1
mation was received from the Inv
Department, Mumbai regard
Man Industries (I) Ltd.
2
s. 617, 618/MUM/2025
nsolidated order having ITA No.
grounds raised se and in dition of 68 of the se and in me of the e income properly on facts order of sessee company d export of large essure transport me electronically
,33,700/- which total income at w.s. 153A of the completed on 55,13,50,398/-.
vestigation Wing ding deposit of Rs.2.50 crores in th source which, the conducted by the Inv
Assessing Officer rec assessment and acc
29.03.2019. The ass notice u/s 148 of th notices under the Ac course of reassessm the assessee to expl
Bank Account No. 0
Rs.2,55,61,006/- wa
Rs.5,00,000/- was tr company maintained the assessee were n made addition u/s 6
cash credit.
4. On further appe the assessee calling f comments were furn considering the sub made by the Assessin
“9. I have con the order of a Sole issue in ITA Nos he bank account of the assess assessee failed to explain vestigation Wing. In view of the i corded reasons to believe that i ordingly issued notice u/s 148
sessee filed return of income he Act on 04.10.2019 and ther ct were issued and complied w ment proceedings, the Assessin lain the deposit of Rs.2,60,61,
019-860063-001. The assessee s received by way of proceeds o ransferred from other bank acco d with the ICICI Bank, but the not accepted by the Assessing
68 of the Act holding the credit eal, the Ld. CIT(A) forwarded th for his comment but despite thre nished by the Assessing Officer.
mission of the assessee delete ng Officer observing as under:
nsidered the facts of the case, discussion assessment and the submission of the n the appeal is the addition of Rs.2,60
Man Industries (I) Ltd.
3
s. 617, 618/MUM/2025
see, nature and during inquiry information, the income escaped
8 of the Act on in response to reafter statutory with. During the ng Officer asked
006/- in HSBC explained that f export bill and ount of assessee explanations of Officer and he as unexplained he submission of ee reminders no . The Ld. CIT(A) ed the addition n made in appellant.
0,61,006/

made u/s 68
on the basis o there were cre of the appell another acc explanation fo entire amoun
68 of the Act
Appellant has raised legal g reopening and issue on meri
9.1. The am
5,00,000 and HSBC bank explained tha
Bank A/c No 860063-001
statement of bank stateme bank account statement ag
07.06.2011. T order.
9.2. The othe the Appellant
M/s. Al Zahe
U 5,20,74
09.02.2012. No.207/EXP/
Al Zahem Inte
Shipping Bill a officer. The e revenue in A received the e
Zahem Intern
INR Rs. 2,55, on 06.03.201
HSBC Bank A channel. The advice for th along with 21.12.2019. ITA Nos of the Act. The case of the appellant was of information received from Investigation edit entries of the said amount in the ban lant followed by immediate transfer of count.
In the assessment proceedi for the credits was not accepted by the A t of was added to the income of the app t, which is being contested in the presen s challenged the addition on merits. It grounds challenging the validity of the re d notice u/s 148 of the Act. I proceed to d ts.
mounts in question are two credit entr d Rs. 2,55,61,006/- transferred to a account no. 019-860063001. Appe at the Rs. 5,00,000/- was transferred from o. 000451000358 to HSBC Bank A/c on 7/6/2011. It has submitted the both the banks as evidence. I have pe ent and find that the name of the appe t no. of ICICI Bank is mentioned on the H gainst the credit entry of Rs. 5,00,
The explanation of the appellant is foun r amount of Rs 2,55,61,006/-, it is expla t had made an export sale to its overseas em International Group for a sale consid
40.76, vide
Export
Invoice no.
20
The relevant
Export
/Anj/Saw/11-12 dated 09.02.2012 raise ernational Group, Packing List, Certificate and Bill of Lading were submitted to the A export sales have been accounted and o
Audited Books of Account. The appe export proceeds of U 5,20,740.76 from national Group on 02.03.2012 being conv
,61,006/- (which includes Rs. 4,94,561/
12 on account of currency exchange diff
A/c No. 019-860063001 through prope e bank realization certificate and bank he same was submitted to the assessi the reply to the show-cause notice
Man Industries (I) Ltd.
4
s. 617, 618/MUM/2025
s reopened wing that nk account f funds to ings, the O and the ellant u/s nt appeal.
t has also easons for decide the ries of Rs appellant’s llant has m its ICICI
No. 019- e account erused the ellant and HSBC bank
000/- on nd to be in ained that s customer deration of 07
dated
Invoice ed to M/s.
e of Origin,
Assessing offered as ellant had m M/s. Al verted into /- received ference) in er banking k payment ing officer filed on 9.3. Thus, th
HSBC Bank A Date
07.06.2011
02.03.2012
06.03.2012
Total
During the ap
1. Statement financial year
2. Statement transfer /deb
3. Copy of No.207/EXP/
Al Zahem Inte
Shipping Bill a 4. Copy of le and submissi
5. Copy of reference of o
12
6. Bank certif remittance of 7. Ledger acc
2011-12 refle books of the a 9.4. I have co the same, it is is received a received throu submitted the accounted fo
ITA Nos e source of credit entries of Rs. 2,60,61
A/c No. 019-860063-001 is as follows:
Amount
Source
Rs.5,00,000.00
Transfer from ICICI
No. 000451000358
Rs.2,50,66,445.09
Export proceeds
5,20,740.76 from M/s AI Zahem Int
Group against Expo
Rs.4,94,561.22
Receipt on acc exchange rate w.r.t.
export received on 02.03.20
Rs.2,60,61,006.31

ppellate proceedings, appellant had produ t of HSBC Account No. 019-860063-00
r 2011-12
of ICICI Account No. 000451000358 refl bit entry of Rs. 5,00,000/- on 07.06.2011
Export documents that includes Expo
/Anj/Saw/11-12dated 09.02.2012 raise ernational Group, Packing List, Certificate and Bill of Lading.
etter addressed to HSBC Bank Ltd for n ion of export documents.
bank advice towards money received our Commercial Invoice No. 207/EXP/Anj/
ificate for export realisation certifying th
U 5,20,740.76
count of M/s. Al Zaheem International Gr ecting the export turnover duly account appellant and export realisation against th onsidered the submissions of the appell s evident that the said amount of Rs. 2,5
against the export sales. The amount ugh banking channels for which the app e Bank certificate. The sale proceeds h or as sales turnover. Further, Rs 5
Man Industries (I) Ltd.
5
s. 617, 618/MUM/2025
1,006/- in Bank A/c of U ternational rt Sale count of difference proceeds
012
uced the 01 for the flecting the ort Invoice ed to M/s.
e of Origin, negotiation d showing
/Saw/11- he inward roup of FY ted in the he sam.
lant. From 55,61,006
has been ellant has have been 5,00,000/- represents th provided by 2,60,61,006.3
section 68 of 9.5. It is also HSBC bank a No. 0004510
Limited as un
1. Rs.4,12,55
year 2011-12
2. Rs.4,50,00
3. Rs. 2,50,0
00045100035
4. Rs. 5,30
14/03/2012. Therefore, it i
HSBC bank a by the Comp appellant has destination of 9.6. The abo assessment p appellant’s c which carried the appellant
“3.2 The asse not found to b assessee are credit entries.
or not the af bank account the onus lies evidences th account are furnish the co
It has, therefo genuineness o
With these ob provisions of s
ITA Nos he interbank transfer. In view of the su the appellant, the said entire credi
31 /- stands explained. Therefore, the pro the Act are not applicable in this case.
seen that the entire amount was transfe account to the bank account at ICICI Ban
000358, which is held by Man Industri nder-
50/-bank charges debited by bank during
2. 00/-transferred to ICICI Bank on 17/02/2
00,000/- transferred to ICICI Bank Ac
58 on 05/03/2012. 0,000/- transferred to Corporation is very clear that the funds are transferre account to other bank accounts held and pany itself and not to any outsider.
s explained the source of the funds as w f the funds.
ove explanation was also provided d proceedings. However, the AO had rej contention. Para 3.2 of the assessment d the AOs comments on the submissions is reproduced as under essee's submission is considered but th be acceptable. The transactions entered i e not vague but specific with reference
. Therefore, the basic issue in question i fore-mentioned credit entries into the a t are genuine or otherwise. In these circu on the assessee to establish along-with s at the credit entries into the assesse genuine. However, the assessee has ogent evidences in respect of the claim m fore, failed to satisfactorily explain the n of the aforesaid transactions”.
bservations, the AO has proceeded to i section 68 of the Act.
Man Industries (I) Ltd.
6
s. 617, 618/MUM/2025
ubmission its of Rs ovisions of erred from nk Account ies (India) g financial
2012. ccount No.
Bank on ed to from d operated
Thus, the well as the during the jected the t order in s made by e same is into by the to certain is whether assessee's mstances, supporting ee's bank failed to made by it.
nature and invoke the 9.7 On perusa explanation p assigning any other evidenc were genuine discharged its was on the appellant, if h not carried ou the Investiga the submissi proceedings.
9.8 From the appellant has bank accoun
2,60,61,006/
directed to de allowed.”
5. We have heard the relevant materials in respect of source o explained that Unit
Rupees 2,55,61,006
against the material
09.02.2012. The ass support of export doc
List, Certificate of Or bank advise, copy of Rs.5,00,000/- (Rs.2
explained that same bank account mainta that assessee has ITA Nos al of the Para 3.2. of the order, it appear provided by the appellant was rejected y specific reasons. AO has not elaborated ce was required to prove that the said cre e sale proceeds. I feel that the Appellant s onus in explanting the source of credits.
AO to conduct further enquiries to dis he was not satisfied with the explanation ut any such enquiry. The information re tion wing has been adopted without co ion made by the appellant in the as e overall facts of the case, it is seen s explained the credits of Rs 2,60,61,00
t with documentary evidences. The ad
- u/s 68 of the Act cannot be uphe elete the said addition. Ground nos 1 a rival submissions of the parti s on record. We find that the iss of the credit of Rs.2,60,61,006/
ted State dollar (U ) 5,20,
6/-) was received from overs l supplied vide export invoice sessee filed all the documenta cuments interalia- Commercial I rigin, Shipping Bill and Bill of bank certificate etc. With respe
2,60,61,006 – Rs.2,55,61,006) e was transferred from the c ained with the ICICI bank. Thu explained source of the to Man Industries (I) Ltd.
7
s. 617, 618/MUM/2025
rs that the d without d on what dit entries t had duly
. The onus sprove the n. AO has eceived by onsidering ssessment n that the 06/- in the ddition Rs ld .AO is and 3 are ies and perused sue in dispute is /-. The assessee
,740.76 (Indian seas customers
No. 207 dated ary evidence in Invoice, Packing
Lading, copy of ect to amount of ) the assessee ompany’s other us, it is evident otal amount of Rs.2,60,61,006/-. Be the source of the dep support thereof. In ou in dispute is well rea same. Accordingly, w the Revenue are acco
6. Now, we take u
618/Mum/2025 for by the Revenue in its 1. Whether, o law, the Lear assessee sole
2. Whether, o law, the Lea
15,54,634/- u sought to be confirmed by of impugned
M/s. Harmon margin from evidence of particulars.
3. Whether, o law, the Lear that penalty arise out of search proce statement on addition mad profit margin concrete evid particulars.
ITA Nos efore the Ld. CIT(A) also the ass posit and filed all the document ur opinion, order of the Ld. CIT asoned and we do not find any we uphold the same. The groun ordingly dismissed.
up the appeal of the Revenue assessment year 2015-16. The s appeal are reproduced as unde on the facts and circumstances of the cas rned CIT(A) erred in allowing the appea ely on the basis of natural justice.
on the facts and circumstances of the cas arned CIT(A) erred in deleting penalty u/s. 271(1)(c) of the Act at the rate of 100
evaded on the addition of Rs. 45,73, the Hon'ble ITAT i.e. estimated profit ma bogus purchases of Rs. 9,14,75,919/-ma ny Exim Pvt. Ltd., basis of an estimate alleged bogus purchases rather than f concealment or furnishing of in on the facts and circumstances of the cas rned CIT(A) erred in deleting the penalty levying on impugned addition which any incriminating materials found du eedings and which was merely ba n third party, without appreciating the de by Assessing Officer basis of an e n from alleged bogus purchases rath dence of concealment or furnishing of in Man Industries (I) Ltd.
8
s. 617, 618/MUM/2025
sessee reiterated tary evidence in T(A) on the issue infirmity in the nds of appeal of having ITA No.
grounds raised er:
se and in al of the se and in y of Rs.
0% of tax
,796/-as argin 5%
ade from ed profit concrete naccurate se and in y stating did not uring the ased on facts on estimated her than naccurate

6396, 6395 & 6397/
2010-11 wherein th estimation of the a under :
“5. We have record. We f following the Construction
05/12/2023]
in the case
Industries [36
CIT(A) reads a "8. Decision:
8.1. The ins u/s.271(1)(c) assessment o being 12.5%
was reduced from 12.5% to The AO has l above additio appeal.
8.2 I have c
Assessment the appellate preceding pa
ACIT, In ITA N dated 05.12. imposable on Court in the c
Industry has estimation ba
There are ca various bench levied on the unsustainable levied u/s 27
of bogus pur directed to d allowed. 9. In ITA Nos

/Mum/2024 for assessment ye e Tribunal has deleted the pe ddition. The relevant para is heard both the sides and perused the m find that the CIT(A) has deleted the p decision of the Tribunal in the case of Co. Vs. ACIT [ITA No. 910/Mum/20
] and judgment of the Hon'ble Rajasthan of CIT vs. Krishi Tyre Retreading a 60 ITR 580]. The relevant extract of the as under:
stant appeal has been filed against dated 05- 01-2022 for A.Y.2008-0
order the AO had made addition of Rs.
of bogus purchases. The above estimate by CIT(A) by reducing the percentage of o 8%. The above order was confirmed by levied penalty of Rs. 67,762/- u/s 271( on, against which the appellant has filed considered the submissions filed by the Year 2008-2009, 2009-2010 & 2010-2
e proceedings, which have been extrac ara. In the case of Supertech Constructi
No. 910/Mum/2023, Hon. ITAT, Mumbai
2023 has held that penalty u/s 271( bogus purchase addition. The Hon. Raja case of CIT Vs. Krishi Tyre Retreading a s held that, where addition is made asis, no penalty u/s 271(1)(c) of the Act atena of decisions by different High C hes of ITAT wherein penalty u/s 271(1)(c e basis of estimated addition has been e. Thus, in the facts of the instant cas
71(1)(c) of the Act levied based on estimat rchases is unsustainable. The assessin delete the penalty. The grounds of ap n the result, the appeal is allowed.
Man Industries (I) Ltd.
13
s. 617, 618/MUM/2025
ears 2008-09 to enalty levied on reproduced as material on penalty by f Supertech
023, dated
High Court and Rubber decision of the order
09. In the 3,42,644/- ed addition f estimation
[ITA No.961 t
2012-13, dat
Deputy Comm
& 4304/Mum dated
03/1
circumstances
Section 271(1
on estimate b with the orde under Section and 3 raised
7.3 Respectfully fol uphold the finding ground of appeal of th
12. In the result, bo
Order pronou
1963 by way of plac (KAVITHA RA
JUDICIAL M
Mumbai;
Dated: 28/05/2025
Rahul Sharma, Sr. P.S.

ITA Nos lt, the appeal is allowed."
nothing on record to persuade us to ta m the above view taken by the CIT(A). T epresentative for the Appellant has also cisions of Mumbai Bench of the Tribunal
Diamonds India Pvt. Ltd. Vs. DCIT 5(1)( to 963/Mum/2023, Assessment Years ted 20/06/2023] and (b) M/s. Vijay Je missioner of Income Tax 19(3), Mumbai [IT m/2024, Assessment Years 2012-13 &
10/2024]
whereby, in identical f s, the Tribunal had deleted penalty le
)(c) of the Act on the ground that addition basis. In view of the above, we decline er passed by the CIT(A) deleting the pen n 271(1)(c) of the Act, and therefore, Grou by the Revenue are dismissed.”
lowing the finding of the Tribu of the Tribunal on the issue he Revenue are accordingly dism oth the appeal of the Revenue ar unced under Rule 34(4) of th cing result on notice board on d/-
S
AJAGOPAL)
(OM PRAK
MEMBER
ACCOUNTA
Man Industries (I) Ltd.
14
s. 617, 618/MUM/2025
ake a view
The Learned o placed on in the case
(1), Mumbai
2010-11 to wellers Vs.
TA No.4203
& 2011-12, facts and evied under n was made to interfere nalty levied und No.1, 2
unal (supra), we in dispute, the missed.
re dismissed.
he ITAT Rules,
28.05.2025. KASH KANT)
ANT MEMBER

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

////

ITA Nos ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Man Industries (I) Ltd.
15
s. 617, 618/MUM/2025
R, gistrar) umbai