VASU IMPEX ,MUMBAI V. ACIT, 19(3), MUMBAI

ITA 5065/MUM/2025

AI Insights

The case involves Vasu Impex, the appellant, contesting an order from the CIT(A) which upheld the Assessing Officer's (AO) decision to tax 100% of certain purchases deemed bogus. These purchases were made from entities linked to Shri Bhanwarlal Jain. The AO had initially assessed the total income of Vasu Impex significantly higher than the returned income due to these additions. The CIT(A) confirmed the AO's findings, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal noted a misunderstanding by the CIT(A), who had addressed the issue as if it involved bogus loan transactions, and not purchases. The Tribunal decided to remand the case for a fresh assessment, emphasizing the need for a correct interpretation of the transactions and proper consideration of the evidence provided by the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846665 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2012-2013
• Appeal Filed On: 18-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: VAIDYALINGAN
• Keywords: Rule of consistency; Bogus purchase; Bogus loan; Bogus
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “F” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 5065/Mum/2025 Assessment Year : 2012-13 Vasu Impex, FW-4120, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai-400051. PAN: AAAFV4971B vs. ACIT-19(3), Piramal Chambers, Lalbaug, Mumbai-400012. (Appellant) (Respondent) For Assessee : Shri K.A. Vaidyalingan For Revenue : Shri Vivek Perampurna, CIT-DR Date of Hearing : 24-03-2026 Date of Pronouncement : 27-03-2026 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 21-06-2025, pertaining to Assessment Year (AY) 2012-13. Printed from counselvise.com 2 ITA No. 5065/Mum/2025 2. Briefly, the facts of the case are that the assessment in this case was completed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 („the Act‟), vide order dt. 13-12-2019, wherein the AO has brought to tax 100% of the bogus purchases made by the assessee from two of the entities belonging to Shri Bhanwarlal Jain group and an amount of Rs. 58,75,850/- was brought to tax in the hands of the assessee and assessed the total income of the assessee at Rs. 96,44,820/- as against the returned income of Rs. 37,68,966/-. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has since confirmed the findings of the AO and against the said order, the assessee is in appeal before us. 3. During the course of hearing, the Ld.AR submitted that the Ld.CIT(A) has dismissed the appeal of the assessee on erroneous understanding of the facts as the impugned addition relates to alleged bogus purchases, wherein the Ld.CIT(A) misunderstood the transactions as alleged bogus loan transactions and decided the appeal as if the issue is of non-genuine loan transaction and the addition has been made u/s. 68 of the Act. In this regard, our reference was drawn to the findings of the Ld.CIT(A), contained at pg No. 21 to 23 of the impugned order. It was further submitted that the Ld.CIT(A) has upheld the addition which has been made purely on surmises and conjectures and without appreciating the documentary evidences furnished in support of genuineness of the purchases so made by the assessee in terms of copies of tax invoices, the appellant‟s bank statement, stock records, confirmation from the suppliers etc. It was also contended that similar addition has been made in the case of assessee for earlier two years i.e., AYs. 2013-14 and 2014-15, wherein similar purchase transactions have been undertaken with the same entities and the AO has only brought to tax 3% of the alleged bogus Printed from counselvise.com 3 ITA No. 5065/Mum/2025 purchases. It was submitted that those orders were available at the time of passing of the re-assessment order for the impugned assessment year and, therefore, following the principle of consistency, the order so passed by the AO cannot be sustained. It was submitted that the said fact was also brought to the notice of the Ld.CIT(A). However, he has failed to consider the same and summarily dismissed the appeal of the assessee. 4. Per contra, the Ld.DR is heard, who has relied on the orders passed by the lower authorities. 5. We have heard the rival contentions and perused the material available on record. We have gone through the findings of the AO in the assessment order and find that the additions have been made towards alleged bogus purchases made by the assessee from two entities belonging to Shri Bhanwarlal Jain group. However, as far as the findings of the Ld.CIT(A) are concerned, we find that Ld.CIT(A) has referred to the alleged bogus loan transaction undertaken by the assessee which were not subject matter of the dispute and has thus not appreciated the precise nature of the transaction under dispute. Further, he has summarily rejected the appeal of the assessee without addressing the various contentions and documentation placed on record by the assessee. We, therefore, find that it would be appropriate that the matter be remanded to the file of the Ld.CIT(A) to decide the same afresh as per law after providing reasonable opportunity to the assessee. The other contentions raised by the Ld.AR in terms of non-rebuttal of the documents placed on record and the fact that in the earlier years, similar additions have been made by the AO wherein the quantum of additions have been restricted to 3% as against 100%, the said contentions are left open and not adjudicated upon and the assessee Printed from counselvise.com 4 ITA No. 5065/Mum/2025 is at liberty to raise the said contentions before the Ld.CIT(A), who shall consider the same as per law while deciding the matter. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 27-03-2026 Sd/- Sd/- [RAHUL CHAUDHARY] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 27-03-2026 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "