SANJAYKUMAR HIRACHAND JAIN,MUMBAI vs. ITO-19(3)(2), MUMBAI
Facts
The assessee, Sanjaykumar Hirachand Jain, appealed an order confirming additions made by the AO for bogus purchases. The AO, based on information from DGIT, treated purchases from Prerna Steel amounting to Rs. 14,50,008/- as bogus.
Held
The Tribunal, following the decision in PCIT v. Mohommad Haji Adam & Co., held that purchases cannot be rejected without disturbing sales in case of a trader. Additions should be restricted to the extent of gross profit on impugned purchases.
Key Issues
Whether the AO was justified in treating the entire purchase amount as bogus, and if not, to what extent should the addition be restricted to gross profit.
Sections Cited
Section 37 of the Income Tax Act, 1961 (implied in the context of business expenditure and additions)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SUNIL KUMAR SINGH, HON’BLE
आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : अपीऱार्थी / The Appellant 1. प्रत्य्रयर्थी / The Respondent 2. 3. संबंधिि आयकर आयुक्ि / Concerned Pr. CIT आयकर आयुक्ि ) अपीऱ ( 4. / The CIT(A)- पिभागीयप्रतितिधि ,आयकरअपीलीयअधिकरण,म ुंबई/DR,ITAT, Mumbai, 5. गार्ड फाई/Guard file. 6.
आदेशािुसार/ BY ORDER, TRUE COPY
Assistant Registrar आयकर अपीऱीय अधिकरण ITAT, Mumbai