TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 336
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....to Assessment Year 2018-19. 2. Brief facts of the case are that the assessee is a company, engaged in the business of manufacturing and trading of cotton waste yarn, cotton yarn, polyester Yarn, etc. and filed its return of income declaring total income of INR 5,25,950/-. Based on the information flagged in Insight portal uploaded by Investigation Wing that assessee had entered into fictious transaction of bogus purchases of INR 10,33,890/- from M/s Sri Rameshwaram International which was alleged as engaged in issuing bogus bills, case of the assessee was reopened by way of issue of notice u/s 148 of the Act and after passing the order u/s 148A(d) of the Act. After considering the replies filed by the assessee, reassessment order was pas....
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....ase in passing the order dated 27.03.2025 ("Impugned Order") under section 263 of the Income Tax Act, 1961 ("the Act") without jurisdiction. 2. That the Ld. PCIT grossly erred in law and on the facts and circumstances of the case in passing the impugned order without considering the provisions of section 263 of the Act. 3. That the Ld. PCIT grossly erred in law and on the facts and circumstances of the case in passing the impugned order without application of mind to the reply filed by the appellant submitting that the provisions of section 69C are not applicable on the facts of the case. 4. That the Ld. PCIT grossly erred in law and on the facts and circumstances of the case in passing the impugned order on the b....
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....aram International as bogus expenditure. As per ld. AR, the AO has taken a plausible view while disallowing the purchases u/s 37(1) of the Act after making proper and adequate enquiries. He submits that the purchases alleged as bogus are duly recorded in the books of accounts maintained in regular course thus the source of such purchases cannot be doubted more particularly when the payments made were through payees account cheque, and therefore provisions of section 69C of the Act cannot be invoked which is applicable where assessee failed to substantiate the source of expenditure. Ld. AR thus, submits that observation of ld. PCIT that Ao should invoke the provisions of section 69C is contrary to the facts of the case and, therefore, the re....
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....5BBE of the Act. It is thus requested that the order of Ld. PCIT deserves to be uphold. 9. Heard both the parties and perused the material available on record. The case of the assessee was reopened u/s 147 of the Act for the reason that the purchases made from M/s Sri Rameshwaram International of Rs. 8,30,400/- is bogus which has been based on the information from Investigation Wing. Further independent enquiry was made through Verification Unit wherein it was found that the supplier company M/s Sri Rameshwaram International was not existed at the given address. Based on these facts, the AO reached to the conclusion that the purchase made of Rs. 8,30,400/- made from M/s Sri Rameshwaram International is bogus and disallowed u/s 37(1) of t....
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....lculated on the income referred to in clause (a) and clause (b), at the rate of sixty percent, and (ii) the amount of income tax with which the assessee would been chargeable had his total income been reduced by the amount of income referred to in clause (i)." 12. From the perusal of section 69C, it is evident that the same is applicable where assessee incurred any expenditure and has failed to offer any Explanation or the Explanation given was not found satisfactory by the AO. 13. In the present case, the ld. PCIT has failed to establish that the assessee has not explained the source of purchases made from M/s Sri Rameshwaram International however, it is the only allegation that the purchases should be disallowed by invoking....
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.... from the disallowance of expenses found to be not genuine. The basic premise with the Id. Pr. CIT therefore for finding error in the order of the AO, that the disallowance made by him of contractors' expense came under the purview of section 69C of the Act is found to be untenable in law. This finding of error, as a consequence whereof, that the same not being subjected to tax at a special rate provided under section 1158BE of the Act also as a result does not survive." 15. Further this view is followed by the Co-ordinate Bench of ITAT, Rajkot in the case of Vijuba Jutubha Jadeja vs. PCIT reported in [2023] ( 9 TMI 206). 16. Following the aforesaid decisions, the coordinate Delhi bench of Tribunal in the case of Joginder Kumar & ....