MEENAXI GEMS PVT LTD,SURAT vs. INCOME TAX OFFICER, WD-1(1)(4), SURAT, SURAT

ITA 613/SRT/2025Status: DisposedITAT Surat27 November 2025AY 2007-08Bench: SHRI DINESH MOHAN SINHA (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the entire purchase could not be disallowed and restricted the addition to 6% of the purchase value, representing the estimated profit. Consequently, the penalty levied under Section 271(1)(c) was deleted as it was based on an estimated addition.

What were the facts?

The assessee company had allegedly made bogus purchases from a supplier identified as an accommodation-entry provider. The Assessing Officer (AO) treated the entire purchase amount as bogus and made an addition to the assessee's income. Penalty proceedings were also initiated.

What were the issues?

The validity of reassessment proceedings initiated under Section 147/148 and the levy of penalty under Section 271(1)(c) on an addition made for alleged bogus purchases.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 145(3),Section 144,Section 271(1)(c),Section 274

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Before: SHRI DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Prakash Jhunjhunwala, AR
For Respondent: Shri Ajay Uke, Sr. DR
Hearing: 15/09/2025Pronounced: 27/11/2025

PER BIJAYANANDA PRUSETH, AM: These appeals by the assessee emanate from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 28.03.2025 and 31.03.2025 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2007-08. One appeal is against quantum assessment and other is against penalty levied under section 271(1)(c) of the Act. Since facts are same, with consent of the parties, both appeals were heard together and a common order is passed for the sake of convenie

The order continues below.

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