ASHOK KUMAR JAIN ,MUMBAI V. INCOME TAX OFFICER , MUMBAI

ITA 932/MUM/2025

AI Insights

The case involves Ashokkumar Jain, the appellant, who contested an addition of Rs. 35,89,934 to his income, deemed as bogus purchases under section 37 of the Income Tax Act, 1961, for the assessment year 2009-10. The addition was initially made by the AO following a reopening of the assessment based on information from the sales tax department, which suggested the purchases were non-genuine. The CIT(A) upheld this addition, leading to the current appeal before the Tribunal. The appellant provided additional evidence to substantiate the genuineness of the purchases, which the Tribunal found necessary to verify, thus remitting the matter back to the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33368 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Other Referred Cases: M/s. Mohommad Haji Adam and Co. vs. (2019) 103 taxmann.com 459, Pr.CIT-5 vs Kanak Impex (Ind) Ltd through ITA No 791 of 2021 pronounced on 03 March 2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUKHE
• Assessee Lawyers: AAKRITI SETH
• Keywords: Opportunity of being heard; Additional evidence; Bogus purchase; Principle of natural justice; Bogus
• Section: 37

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT MEMBER) I.T.A. No. 932/Mum/2025 Assessment Year: 2009-10 Ashokkumar Jain No 24/1, 2nd Main Road, New Extn, Kalasipayam, Bangalore - 560002 PAN: AIUPJ4290K Vs. CIT(A)- 30/ITO19(1)(2) Income Tax Department, Matru Mandir, Tardeo, Mumbai – 400007. (Appellant) (Respondent) Appellant by Ms. Aakriti Seth Respondent by Shri. Pravin Salukhe, SR. D.R. Date of Hearing 19.03.2025 Date of Pronouncement 27.03.2025 ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 26/09/2019 passed by Ld. CIT(A) - 30, Mumbai for assessment year 2009-10 on following grounds of appeal : “1. The First Appellate Authority has erred on facts and in law by affirming the addition of Rs. 35,89,934/- (Rupees Thirty Five Lakhs Eighty Nine Thousand Nine Hundred and Thirty Four Only) to the returned income of the assessee under section 37 of the Income Tax Act, 1961 by deeming the purchases as bogus purchases. On the facts and in the circumstances of the case and 2 ITA 932/Mum/2025; A.Y. 2009-10 Ashokkumar Jain in law the penalty levied is unsustainable and is liable to be deleted as such. Hence it is prayed to Your Honor to give due directions to delete the penalty on the grounds of natural justice. 2. That the appellant craves leave for reserving the rights to amend, modify, alter, add, or forego any ground(s) of appeal at any time before or during the hearing of this appeal.” 2. At the outset the Ld.AR submitted that, the assessment was reopened based on the findings of the sales tax department which was shared with the DGIT INV Mumbai. Based on the information, the Ld.AO reopened the assessment of the assessee by forming a reasonable belief of income having escaped the assessment on account of bogus purchases. The Ld.AO called for various details and after considering the submissions of the assessee made addition of Rs. 35,89,934/- being 100% of the non genuine purchases. Aggrieved by the order of the Ld.AO assessee preferred appeal before the Ld.CIT(A). 3. The Ld.CIT(A) however upheld the addition made by the Ld.AO. The assessee had relied on the decision of Hon’ble Bombay High Court in case of M/s. Mohommad Haji Adam and Co. reported in (2019) 103 taxmann.com 459. Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal. 4. The Ld.AR filed before this Tribunal certain additional evidence in order to establish purchases to be bonafide. The assessee also filed bank statements, highlighting the payment were made through banking channel in respect of the sales invoice, the delivery challan, the VAT order report etc. He submitted that all these details are necessary to establish the genuiness of the purchases made by the assessee. 3 ITA 932/Mum/2025; A.Y. 2009-10 Ashokkumar Jain 4.1 On the contrary the Ld.DR placed reliance on recent decision of by Hon’ble Bombay High Court in case of Pr.CIT-5 vs Kanak Impex (Ind) Ltd through ITA No 791 of 2021 pronounced on 03 March 2025, on identical issue in support of the addition to be upheld. We have perused the submissions advance by both sides in the lights of records placed before us. 5. It is noted that, the additional evidences produced by the Ld.AR are necessary to be verified in the light of the ratio by Hon’ble Bombay High Court in case of Pr.CIT-5 vs Kanak Impex (Ind) Ltd (Supra). By the consent of Ld.AR we deem it proper to remit this issue back to the Ld.AO to carry out necessary verification in the light of the decision of by Hon’ble Bombay High Court. Needless to say that proper opportunity of being heard must be granted to the assessee and the assessee is at liberty to furnish all the necessary evidence to substantiate its claim which shall be subjected to verification by the Ld.AO. 6. Accordingly the grounds raised by the assessee stands partly allowed for statistical purpose. In the result the appeal filed by the assessee stands allowed for statistical purpose. Order pronounced in the open court on 27/03/2025 Sd/- Sd/- (OMKARESHWAR CHIDARA) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 27/03/2025 Poonam Mirashi, Stenographer 4 ITA 932/Mum/2025; A.Y. 2009-10 Ashokkumar Jain Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt.Registrar) ITAT, Mumbai "