TaxTMI 
TaxTMI 
2026 (7) TMI 1981
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....Act, 1961 [in short, "the Act"] dated 07-03- 2025, passed by Assessment Unit, Income Tax Department [in short, "the Ld. AO"]. The grounds of appeal raised by the Revenue are as under: "1. Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in restricting the addition on account of bogus purchases u/s 69C of the Act to 12.5% by relying on the decision of the Gujarat High Court in the case of CIT v. Simith P. Sheth, without considering the position of law established by the Hon'ble Bombay High Court in the case of PCIT-5 vs Kanak Impex (India) Ltd, ITA No.791 of 2021 dated 03.03.2025 and PCIT u. Disha Impex Pvt. Ltd., that 100% disallowance on bogus purchase is to be upheld." 2. Whether, on the fact....
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....- and u/s 68 for Rs. 1,60,67,982/-. Further an addition on account of difference in contract income of the assessee as per 26AS as against the turnover shown by the assessee in its P & L, was made for Rs. 1,56,13,896/-. 3. The assessee preferred an appeal before the Ld. CIT(A), who restricted the addition u/s 69C to Rs. 7,51,016/- (12.5% of alleged transactions), whereas the addition u/s 68 for Rs. for Rs. 1,60,67,782/-and Rs. 1,56,13,896/- on account of difference in turnover as per 26AS viz-a-viz P&L of assessee are directed to be deleted. 4. While deciding the issue, the Ld. CIT(A) had considered the submission of the assessee and had arrived at a conclusion that as per the ratio of law emerging from the judgment in Hon'ble Gujarat....
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....e addition made by the Ld. AO at 12.5% of the bogus transactions instead of the entire amount of alleged purchases. The Revenue relied on the decision of Hon'ble Bombay High Court in the case of PCIT-5 vs. Kanak Impex India Limited in ITA No.791 of 2021 date 03.03.2025 and PCIT vs. Disha Impex Private Limited. 8. At the outset, Ld. DR representing the Revenue submitted that the CIT(A) was not correct in following the decision of Hon'ble Gujarat High Court in the case of CIT v. Simit P. Sheth (supra),whereas in the facts and circumstances of present case, the decisions of Hon'ble Bombay High Court in PCIT-5 vs. Kanak Impex India Limited and PCIT vs. Disha Impex Private Limited (supra)are more relevant to be adopted. Accordingly, it is req....
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....Ld. AO has added the entire alleged bogus purchases of the assessee to the income of assessee for the year under consideration. Ld. AO has also rejected the books of assessee on account of difference in turnover as per Form 26AS and the turnover declared by the assessee in its P & L account. The difference of turnover has been examined by the Ld. CIT(A), who has found that it was just on account of certain advance payments received by the assessee which are duly offered to tax in the ensuing year. Therefore, such difference of turnovers cannot be the reason for addition in the hands of assessee. Once the issue of difference in turnover, which was the sole genesis for rejection of books of accounts of the assessee has been ruled out, the boo....