AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 1536
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....ntry Providers as per the Maharashtra VAT Department, that these groups, were involved in providing bogus bills without any actual supply of materials to assessee firm and has not appreciated the fact that PAN of the assessee lying at Ajmer and assessee has not objected to the reassessment proceedings and filed details for completion of the assessment, which has been done in the system using the assessee's PAN. Thereafter, the PAN of the assessee had been transferred on 30.01.2015 to Mumbai charge for subsequent actions on system." "2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of bogus purchases of Rs. 5,04,94,046/-made from M/s. Kotsons Impex Pvt Ltd., M/s. Shree Jalaram Enterprises and M/s. Excellent Diamonds Pvt Ltd., a Hawala Bogus Entry Providers as per the Maharashtra VAT Department received through DGIT(Inv), Mumbai that these groups, were involved in providing bogus bills without any actual supply of materials to assessee firm and has not appreciated the fact that AO has given detailed reasoning for quantifying the additions made" "3. Whether on the facts and circumstances of....
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....n'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated 16.01.2017, which is on the similar issue of bogus purchases, was already the law of the land when the Ld. CIT(A) has pronounced it's order on 12.06.2025?" "8. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition without appreciating the fact that in the case of M/s. Swatamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmedabad had confirmed the disallowance of the bogus purchase, by stating that the purchases shown from respective parties were found non genuine and the decision of the ITAT was upheld by Hon'ble Gujarat High Court and also by the Hon'ble Supreme Court ?" "9. Whether on the facts and circumstances of the case and in law, the decision of the Ld. CIT(A), is right in view of the decision of the Hon'ble High Court Mumbai, in the case of Pr. Commissioner of Income-Tax-5, Mumbai Vs. Kanak Impex (India) Ltd (2025) 172 Taxmann.com 283 (Bombay) Dated 03.03.2025, wherein the decision of 100% addition made by AO has been allowed, by rejecting the ITAT's decision of estimating the profit rate @3% on bogus....
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....sferred on 30.04.2015 to Mumbai charge for subsequent actions on system". "2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of bogus purchases of Rs. 9,76,80,105/-made from M/s. Navpad Exports Pvt Ltd., M/s. Shree Jalaram Enterprises, M/s. Saileela Trading Pvt Ltd. and M/s. Trichipuram Trading Pvt Ltd., a Hawala Bogus Entry Providers as per the Maharashtra VAT Department received through the DGIT(Inv), Mumbai that these groups, were involved in providing bogus bills without any actual supply of materials to assessee firm and has not appreciated the fact that AO has given detailed reasoning for quantifying the additions made". "3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has not appreciated the fact action of the AO was based on information/report received from the Maharashtra VAT Department through DGIT (Investigation Wing), Mumbai that these groups, all are hawala traders who were indulged in the practice of providing accommodation entries of issuing bogus Sales/Purchase bill without supplying any goods and the assessee was found to be one of the ben....
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....ppreciating the fact that in the case of M/s. Swatamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmadabad had confirmed the disallowance of the bogus purchase, by stating that the purchases shown from respective parties were found non genuine and the decision of the ITAT was upheld by Hon'ble Gujarat High Court and also by the Hon'ble Supreme Court ?" "9. Whether on the facts and circumstances of the case and in law, the decision of the Ld. CIT(A), is right in view of the decision of the Hon'ble High Court Mumbai, in the case of Pr. Commissioner of Income-Tax-5, Mumbai Vs. Kanak Impex (India) Ltd (2025) 172 Taxmann.com 283 (Bombay) Dated 03.03.2025, wherein the decision of 100% addition made by AO has been allowed, by rejecting the ITAT's decision of estimating the profit rate @3% on bogus purchases and thereby impliedly grant deduction of such unexplained expenditure incurred u/s. 69C of the Act, even though the assessee failed to discharge its onus to prove the genuineness of alleged purchases and has offered no explanation of the sources of expenditure incurred on account of such purchases ?" "10. The tax effect involved in this case is Rs. 4,82,66,860/-, which ....
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....ver the case was transferred to DCIT, Mumbai vide 127 order dated 20-10-2010 as per remand report submitted by him during appeal proceedings in assessee's case for assessment year 2010-11. • Order passed by AO without issuing notice u/s. 143(2) is invalid. • The assessee was already treated as accommodation entry provider wrt transactions under consideration for the year while completing assessment u/s. 143(3) rws 147 and commission income on account of providing accommodation entries was offered to tax. 3.1. The Ld.CIT(A), after considering the submissions of the assessee observed and held as under: "8.3.3 I have examined contentions of appellant. It is noticed that DCIT, Central circle 7(3), Mumbai has submitted remand report on 7-03-2018 to CIT(A) for assessment year 2010-11 in which comments regarding jurisdiction over case of appellant has been made. DCIT, Central circle 7(3), Mumbai has stated that the case of appellant has been transferred from ACIT, Circle 2, Ajmer to DCIT, Central Circle 7(3), Mumbai by way of centralization order u/s. 127 dt 20-10-2010. Further it is noticed that DCIT, Central Circle 7(3), Mumbai has reopened the case....
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....es has held reopening of the case by DCIT, Central Circle 7(3), Mumbai as invalid. Relevant extract of ITAT order is reproduced as under:- "7. I have carefully considered the rival submissions in the light of decisions relied upon and perused the material on record. The factual matrix clearly reveal that pursuant to a survey under section 133A of the Act carried out in case of the assessee certain information came to the notice of the Department indicating that the assessee was actually not carrying out any purchase or sales transactions and was merely providing accommodation entries. In the statement record during the survey operation, the assessee also admitted the aforesaid factual position. Thus, while completing the assessment originally the Assessing Officer treated the entire purchase and sales transaction by the assessee as bogus and estimated commission income on the sales turnover shown by the assessee. As could be seen, after completion of the original assessment, the Department received information from the Sales Tax Department, through the DGIT (Inv.), Mumbai, revealing that purchases worth Rs. 5.04.00.000, claimed to have been made from three parties are non-....
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....on of ACIT, Circle 2, Ajmeer over the case of appellant for the year under consideration when 127 order was passed on 20-10-2010 much prior to issue of notice u/s. 148 on 28-03-2014 centralizing the case with DCIT, Central Circle 7(3), Mumbai. There can't be two assessment orders in respect of same assessee for the same assessment year by two different AOs. Hon'ble Bombay high court in CIT vs. Lalitkumar Bardia 404 ITR 63 Dated 11th July, 2017 held that just because assessee participated in assessment proceedings does not confer jurisdiction of the case to AO if the case is already transferred u/s. 127. Therefore, it is to be held that notice issued u/s. 148 and order under appeal passed by ACIT, Circle 2, Ajmeer is without jurisdiction. Therefore, order passed by AO is held to be not legally valid. Consequently, Ground of appeal 2 of appellant is Allowed." Aggrieved by the order of the Ld.CIT(A), the revenue is in appeal before this Tribunal. Assessment year 2009-10 4. The Ld.DR submitted that nothing on merits have been decided by the Ld.CIT(A) and therefore revenue agitated all issues before this Tribunal. 4.1. On the contrary, the Ld.AR relied on the view taken by t....
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....er, bank account highlighting payment made and VAT Audit report, parties PAN, VAT Number and ROC status. (Page No. 10-12 of FPB) 27.03.2015 Assessment order passed u/s. 143(3) r.w.s 147 disallowing purchases of Rs. 5,04,94,046/- for the purchase of Respondent from alleged entry providers namely M/s Kotisons Impex Pvt Ltd., M/s Shree Jalaram Enterprise and M/s Excellent Diamonds Pvt Ltd. (Page No. 13-21 of FPB). The disallowance made by Ld. ACIT, Circle-2, Ajmer without having jurisdiction as Respondent jurisdiction already transferred to DCIT, Central Circle-42, Mumbai vide order dated 20.10.2010 hence ACIT, Circle-2, Ajmer was having no jurisdiction after 20.10.2010 to reopen assessment and pass assessment order. 4.3. The Ld.AR thus submitted that the jurisdiction over the assessee was validly transferred from ACIT, Circle-2, Ajmer to DCIT, Central Circle-42, Mumbai by order dated 20.10.2010 passed under section 127. Once such transfer takes effect, the original Assessing Officer at Ajmer becomes functus officio and ceases to have any authority over the case. He thus submitted that The entire reassessment proceedings are void ab initio for want of jurisdiction. We have....