IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 39 of 2025 ==========================================================

PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus PANKAJ KANWARLAL JAIN (HUF)

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Appearance:

KARAN G SANGHANI(7945) for the Appellant(s) No. 1 ==========================================================

CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 27/01/2026

ORAL ORDER

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. In the present Tax Appeal, the appellant revenue has challenged the order dated 25.07.2024 passed by the Income Tax Appellate Tribunal, Surat in ITA No. 752/ SRT/2023 for A.Y. 2012-13 (for short ‘the Tribunal’).

2. At the outset, learned Senior Standing Counsel Mr. Karan Sanghani very fairly pointed out that the proposed substantial questions of law in present appeal will not arise in view of the decision of this Court dated 11.09.2023 passed in Tax Appeal Nos. 480 and 488 of 2023, reported in [2023] 156 taxmann.com 82 (Gujarat), in case of Principal Commissioner of Income-tax v. Rakesh Kailashchand Jain.

3. In the present appeal, the revenue has assailed the order dated 25.07.2024 wherein the Tribunal has partly allowed the appeal of the assessee, restricting the addition of bogus purchases @ 6% against the addition made by the Assessing Officer at the rate of 100% of bogus purchases amounting to Rs.2,76,52,019/-.

4. The Coordinate Bench in case of Rakesh Kailashchand Jain (supra), against the appeal considering the bogus purchases of Rajendra Jain Group has held thus:

“3.1 Facts in brief indicate that in this case, the assessee is an individual engaged in the business of trading activity of diamonds. The assessee had filed his return of income. Information was received by the DGIT (Investigation), Mumbai that during the search proceedings in the case of Rajendra Jain group on 03.10.2013, it was gathered that the Rajendra Jain group was engaged in the business of issuing non genuine purchase bills, unsecured loans and accommodation entries to various parties.

3.2 In each case, a scrutiny assessment under Section 143(3) of the Act was carried out determining a figure of total assessed income on account of unexplained purchases being accommodation entries. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), Surat. The appeals were partly allowed whereby the CIT(A) confirmed 5% of the impugned purchase. Aggrieved by the decision of the CIT(A) Surat, the Revenue preferred appeals before the Tribunal, Surat which by order dated 21.10.2022 partly allowed the appeals of the Revenue and restricted the disallowance at the rate of 6% of the impugned purchase.

3.3 Perusal of the order of the Tribunal would indicate that having noticed that the grievance of the assessees in these appeals is that they had submitted bills and vouchers, stock registers and the transactions were through banking channels and therefore addition at the rate of 5% sustained by the CIT(A) should be deleted whereas the main grievance of the revenue was that since all the purchases were bogus and in the nature of accommodation entry, the addition made by the assessing officer should be sustained. The Tribunal noted that the issue under consideration was squarely covered by the judgement of the coordinate bench in the case of Pankaj A Chaudhary in ITA No. 1152/AHD/2017 dated 27.09.2021 wherein the coordinate bench at Surat had sustained the addition at the rate of 6% of bogus purchases.

4. When the appeals were taken up for hearing, learned advocate appearing for the Revenue submitted that the order of the Tribunal in the case of Pankaj K. Chaudhary was carried in appeal before this court and this court by an oral order dated 07.03.2023 in Tax Appeal No. 617 of 2022 held as under:

“5.3 Considering the facts and relevant aspect, the Income Tax Appellate Tribunal partially allowed the appeal of the assessee