ACCOST MEDIA LLP,MUMBAI V. DCIT CIRCLE 27(1), NAVI MUMBAI

MA 184/MUM/2025

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The case involves Accost Media LLP, the applicant, seeking a recall of a Tribunal order dated 10/12/2024 concerning the assessment year 2021-22. The Tribunal had previously upheld an addition to the assessee's income, estimating 12.5% of certain purchases as bogus, based on thorough inquiries including notices under section 133(6) and physical verifications, which raised doubts about the authenticity of the transactions. The assessee argued that the Tribunal had not correctly reproduced paragraphs from a cited decision and that the facts of their case were similar to those in Ashok Kumar Rungta vs. ITO, where the High Court had found disallowance by 10% estimate unwarranted. However, the Tribunal dismissed the application both on procedural grounds (being time-barred) and on merits, noting that the assessee's case did not meet the threshold for a review.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779868 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 16-07-2025
• Other Referred Cases: Ashok Kumar Rungta vs. ITO, PCIT vs. Ashwin P Bajaj, H. R. Mehta vs. ACIT, Leena Power Tech Engineers (P.) Ltd. v. Deputy Commissioner of Income-tax, Karuturi Global Ltd. v. Dy. CIT, Ram Baburao Salve, Ashwin P Bajaj, Mather & Platt (India) Ltd vs. CIT, Sanjay Dhokad vs. PCIT, Hindalco Industries Ltd vs. DCIT, Nikunj Eximp Enterprises (P) Ltd vs. CIT, Isagro (Asia) Agrochemicals (P) Ltd vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: GUNJAN KAKKAD
• Keywords: Condonation of delay; Business income; Bogus purchase; TDS; Bogus
• Section: 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No.184/Mum/2025 (Arising out of I.T.A No.4553/Mum/2024) (Assessment Year: 2021-22) Accost Media LLP 710, 7th Floor, Bhaveshwar Arcade Annex LBS Marg, Opp. Shreyas Cinema, Ghatkopar, Mumbai-400 086 PAN : AAFFO3393K vs DCIT, Circle 27(1), Mumbai IT Office, Vashi Railway Station Building, Navi Mumbai-400 703 RESPONDENT IN M.A. APPLICANT IN M.A. Assessee by : Shri Gunjan Kakkad Respondent by : Shri Leyaqat Ali Aafaqui (SR. DR) Date of hearing : 12/09/2025 Date of pronouncement : 13/10/2025 O R D E R Per Anikesh Banerjee (JM): This miscellaneous application filed by revenue arises of the Tribunal order dated 10/12/2024 passed in ITA No.4553/Mum/2024 for assessment year 2021-22. The assessee seeks recall of the order dated 10/12/2024 passed by the on the following grounds:- Printed from counselvise.com 2 MA No.184 /Mum/2025 Accost Media LLP “5. The relevant facts which were pointed out before the Tribunal have been recorded at paragraph 3 of the impugned order of the Tribunal. It has been expressly recorded by the Tribunal that the Applicant had pointed out that the suppliers have filed the GST returns and that the payments have been made through banking channels. The Tribunal has also recorded that out of the 28 parties, physical verification of only 3 parties was carried out and in respect of other parties, notices under section 133(6) of the Act was issued which were not responded to by the said parties. 6. From the compilation of judgments filed before the Tribunal, the Applicant had pointed out the decision of the Hon'ble Bombay High Court in the case of Ashok Kumar Rungta vs. ITO (2024) 167 taxmann.com 429 (Bombay). In this case, the Tribunal had upheld an addition by estimating 10% of the bogus purchase as an appropriate amount on the ground that the Assessee in that case had failed to produce the parties from whom the alleged purchases were made and the documents to prove the movement of goods. The Tribunal in that case concluded that goods have been purchased from the grey market and thus, 10% was the appropriate amount. 7. The Hon'ble High Court had rejected the contention that merely because suppliers were not produced before the Assessing Officer cannot be a ground to disallow the claim of expenditure. 8. The Applicant further states that it had pointed out from the factual paper book that was filed before the Tribunal that in the present case, the suppliers had generated e-way bills which are required for transportation of goods which also mentions the details of the vehicle for transportation of goods 8.1. Decision of the Hon'ble Tribunal a. The Hon'ble Tribunal has recorded that the Applicant had placed written submission on record. b. The Hon'ble Tribunal has considered the decision of the Hon'ble Bombay High Court in case of Ashok Kumar Rungta (supra) in paragraph 5 of the order and states that it has reproduced paragraphs 12, 13 and 14 of the decision. c. After recording the contentions of the Respondent, the Tribunal at paragraph 8 of the order has held that (1) the Respondent has carried out a thorough enquiry by issuing notice under section 133(6) and by carrying out physical verification (2) Printed from counselvise.com 3 MA No.184 /Mum/2025 Accost Media LLP claim of Applicant is supported by documentary evidence and (3) doubt remains on the nature of business activity and the authenticity of the transactions. d. The Learned Representative of the Respondent had urged that the creditworthiness of the suppliers is in doubt in view of non-filing of income-tax returns and non-declaration of the parties in their respective ITRs. The Hon'ble Tribunal had accepted the said argument. e. Reference was made to the decision of the Hon'ble Bombay High Court in case of PCIT vs. Ashwin P Bajaj (ITA No. 576 of 2018) where 12.50% was upheld. f. The Tribunal has distinguished the decision in the case of Ashok Kumar Rungta (supra) on the ground that in that case, the AO had carried out insufficient enquiries while in the present case, the AO had carried out exhaustive enquiries. It was held that considering these facts, impugned order of the CIT(A) was upheld. 9. Ground for miscellaneous application before the Hon'ble Tribunal In respect of the findings of the Tribunal, the Applicant most respectfully states as under: a. The Applicant at the outset would clarify that the written submission that were on record were the submission before the CIT(A). Before the Hon'ble Tribunal, no such written submission were filed, and the parties had raised their contentions in their respective appeals orally. b. In paragraph 5 of the Tribunal order, the portion of paragraphs 12, 13 and 14 which is stated to have been reproduced from the decision of Ashok Kumar Rungta (supra) is not the correct reproduction. The said paragraphs are reproductions of a different decision of the Hon'ble Bombay High Court which was not even the case of the Applicant. c. The Applicant states that even in case of Ashok Kumar Rungta (supra), the AO had carried out verification and sought for the presence of the suppliers. In that case as well, the suppliers had not appeared before the AO. However, the claim of the Assessee in that case was supported by documentary evidence such as sales tax returns and VAT Audit reports. In such circumstances, the Hon'ble High Court held that disallowance by 10% estimate is not warranted. The facts being identical, Printed from counselvise.com 4 MA No.184 /Mum/2025 Accost Media LLP the Applicant submits that the decision of Ashok Kumar Rungta ought to have been followed. d. The Applicant most respectfully states that the facts in the present case are even better than the case of Ashok Kumar Rungta (supra) insofar as in the present case, the Applicant has pointed transportation of goods by producing the e-way bills which was generated by the very supplier which is alleged to be non-existent. The Applicant submits that the finding that the suppliers are non-existent is without considering the material which was admittedly on record. It is respectfully submitted that in view of the documents such as GST returns, e-way bills, GST registration number (which itself are based on permanent account number), etc. of the suppliers, the Tribunal has erred in holding that the identity, genuineness and creditworthiness of the suppliers is not established. e. It is a matter of record that the Respondent in his show cause notice had never mentioned that physical verification of the parties was carried out. This aspect was brough out in the assessment order for the first time. The Applicant therefore submits that it never had an opportunity to address this aspect of the matter. It is settled law that any addition made to the total income without providing opportunity goes to the root of the matter and must thus be disregarded as being held by the Hon'ble Bombay High Court in case of H. R. Mehta vs. ACIT (2016) 387 ITR 561 (Bombay). The Applicant most respectfully submits that the Tribunal has failed to appreciate this aspect of the matter. f. In order to establish the genuineness of the purchases, the Applicant had specifically contested before the Respondent that owing to the fire in its factory. it has lost its records. It was also submitted that photos and videos can be produced to demonstrate material consumption. This argument is reproduced in the assessment, and it is submitted that this aspect of the matter also has not been considered. g. The Applicant had also pointed out that it had filed a compilation of judgments and in the said compilation, the decisions in case of Mather & Platt (India) Ltd vs. CIT (1987) 168 ITR 493 (Calcutta), PCIT vs. Sanjay Dhokad (2023) 456 ITR 77 (Bombay), Hindalco Industries Ltd vs. DCIT (2024) 165 taxmann.com 606 (Mumbai- Trib.), CIT vs. Nikunj Eximp Enterprises (P) Ltd (2015) 372 ITR 619 (Bombay) and Isagro (Asia) Agrochemicals (P) Ltd vs. DCIT (2024) 206 ITD 171 (Mumbai-Trib.) were cited in support of the proposition that non-response to notice under section Printed from counselvise.com 5 MA No.184 /Mum/2025 Accost Media LLP 133(6) of the Act and lack of presence of the party upon physical verification is no ground to disallow the claim of the Applicant. The Applicant most respectfully submits that the Hon'ble Tribunal has failed to consider the decisions cited during the course of hearing. h. The Applicant had specifically contested before the Respondent that discrepancies in the ITRs filed by the suppliers cannot be attributed to the Applicant. The suppliers, especially the labour parties, are located in villages and in remote locations. ITRs of these parties was brought on record before the Tribunal. It is submitted that filing a true and correct return is a duty of the respective supplier and the same could never be attributed to the Applicant. It is also submitted that if the suppliers have indeed filed returns under GST and before the income-tax authorities, the question of identity can never arise. This aspect of the matter has not been considered. 10. The Applicant submits that grave prejudice has been caused owing to the mistake apparent on record as has been pointed out above. The Applicant most respectfully submits that the Hon'ble Tribunal recalls its order dated 10 December 2024 and adjudicates the appeal of the Applicant on its merits.” 3. We have considered the submissions of the rival parties. We find that as per section 254(2) of the Act, the Tribunal can rectify the mistake only within six months from the end of the month in which the order was passed. The miscellaneous application itself has been filed on 09/04/2025, i.e. beyond six months from the end of the month in which the order was passed, as the order of the Tribunal has been passed on 13/08/2024. Accordingly, we find that the miscellaneous application filed by the assessee has to fail as unadmitted. 4. Even, on merits, we find that the assessee, in fact, seeks review of the order passed by the Tribunal, which is not permitted by law, as the Bench, on the basis of material placed before it, has taken the view by recording the following findings:- Printed from counselvise.com 6 MA No.184 /Mum/2025 Accost Media LLP “8. After hearing the submissions of both parties and reviewing the documents on record, we proceed to dispose the appeal filed by the assessee. It is evident that the Ld. AO conducted a thorough inquiry, including issuing notices and utilizing the Verification Unit. However, the identity of the parties involved in the transactions, was not conclusively established. The expenses recorded by the assessee in relation to purchases and labor charges were supported only by documentary evidence. The Ld. AR presented documents related to compliance with the GST Act, including GST returns, Input Tax Credit (ITC) claimed by the assessee, and evidence of Tax Deducted at Source (TDS) from the concerned parties. However, the Ld. DR highlighted specific issues regarding the creditworthiness of the parties, their non-filing of Income Tax Returns (ITRs), non-declaration of business income by the parties and the lack of identification during the verification process conducted by the Ld. AO. The Ld. DR also emphasized that mere inclusion of these transactions in GST returns is insufficient to establish the identity of the parties, a requirement the assessee failed to meet during the proceedings. The Ld. AO undertook verification efforts by issuing notices under Section 133(6) of the Act and through the Verification Unit. Despite these steps, discrepancies remained, including ambiguity regarding the nature of the business activities of the parties. Notably, among the 28 parties involved, 9 had not filed their ITRs, casting doubt on the authenticity of the transactions. The Ld. CIT(A) deemed the entire set of purchases as bogus and relied on the judgment of the Hon'ble High Court of Bombay in PCIT-19 v. Ashwin P Bajaj (Appeal No. 576/2018, dated 12/07/2023). Following this precedent, the Ld. CIT(A) restricted the addition to 12.5% of the alleged bogus purchases, amounting to Rs. 2,16,42,907/-. While we considered the judgment of the Hon'ble Bombay High Court in Ashok Kumar Rungta (supra), which addressed cases involving insufficient inquiries by the Ld. AO, we note that in the present appeal, the Ld. AO conducted a comprehensive investigation, providing the assessee with ample opportunities, including virtual hearings, to present evidence. Considering these facts, we find no infirmity in the impugned order passed by the Ld. CIT(A). Therefore, the impugned appeal order is upheld.” Printed from counselvise.com 7 MA No.184 /Mum/2025 Accost Media LLP 5. As per the provisions of section 254(2) of the Act, the Tribunal can rectify any apparent mistake within six months from the end of the month in which the order was passed. Accordingly, we find that the miscellaneous application filed by the assessee is barred by limitation and, therefore, not maintainable. The Ld. AR has also not placed on record any judicial precedent or ruling to support the condonation of delay in filing the miscellaneous application. The issue is dealt by the Hon’ble Bombay High Court in the case of Leena Power Tech Engineers (P.) Ltd. v. Deputy Commissioner of Income-tax [2025] 172 taxmann.com 424 (Bombay), held that: - “16. Given the above position, sufficient cause, if any, would be irrelevant. The ITAT has also not gone into the issue of sufficient cause but by relying on the decision of the Karnataka High Court Karuturi Global Ltd. v. Dy. CIT [2020] 116 taxmann.com 924 (Karnataka) held that it has no power to condone the delay in entertaining an application under Section 254(2) of the IT Act. 17. Since the ITAT's view aligns with that of our coordinate bench in Ram Baburao Salve (supra) and the decision of the Karnataka High Court in Re. Karuturi Global Ltd. (supra), we see no good ground to interfere with the impugned order.” In view of the above & respectfully following the order of Hon’ble Jurisdictional High Court, we hold that the miscellaneous application is dismissed being barred by limitation. 4. In the result, the miscellaneous application filed by the assessee is dismissed. Order pronounced in the open court on 13/10/ 2025 Sd/- sd/- (NARENDRA KUMAR BILLAIYA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, िदनांक/Dated: 13/10/2025 Pavanan Printed from counselvise.com 8 MA No.184 /Mum/2025 Accost Media LLP Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकर आयु\u0014 CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, JODHPUR 5. गाड\u0019 फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI Printed from counselvise.com "