IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1112 of 2024 ==========================================================

THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus ROHIT LODHA C/O KETAN H SHAH ==========================================================

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 : 09/02/2026

ORAL ORDER

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

1. Learned Senior Standing Counsel Mr.Sanghani, at the outset, has fairly pointed out that the proposed substantial questions of law in the present Tax Appeal will not arise in view of the judgment of this Court dated 23.09.2024 passed in Tax Appeal No.832 of 2024, in the case of Principal Commissioner of Income-tax v. Keshri Exports, [2024] 168 taxmann.com 528 (Gujarat).

2. In the present Tax Appeal, the appellant revenue has assailed the order dated 02.07.2024 passed by the Income Tax Appellate Tribunal, Surat in ITA No.854/ SRT/2023 for A.Y. 2012-13, wherein the Tribunal partly allowed the appeal of the Assessee restricting the disallowance @ 6% of the bogus purchases against the addition made by the Assessing Officer at the rate of 100% of bogus purchases amounting to Rs.4,10,30,197/-.

3. At this stage, we may refer to the decision of the Coordinate Bench in case of Keshri Exports (supra). In an appeal filed by the revenue, proposing the identical substantial question of law, this Court has held thus:

“5. Considering the above submissions, the relevant extract from the order of the Tribunal is reproduced herein below:

“18. As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non- genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. Therefore, we dismiss the ground raised by the assessee challenging the validity of reassessment.

19. In the result, appeals filed by assessees (ITA Nos. 889 to 893/AHD/2017 and ITA Nos. 761 to 762/SRT/2018) are dismissed, whereas the appeal filed by the Revenue (ITA No.916 to 920/AHD/2017 and ITA Nos. 753 to 754/SRT/2018) are partly allowed.”

6. This Court in case of Pankaj K. Choudhary (Supra) while dismissing the Tax Appeal No.617 of 2022 has held as under:

“5. The Assessing Officer noticed the contentions of the assessee that confirmation, purchase bills, bank statement, stock register, copy of ITR were already filed. The Assessing Officer was, however, of the view that transactions were bogus and merely that it routed through the banking channel, was not sufficient to conclude that they were the genuine transactions. The contention of the assessee that he had not dealt with the Bhanvarlal Jain group was also negatived. The appellate Commissioner took the view that disallowance was required to be sustained at 12.5% of the purchase. The Assessing Officer was directed accordingly to workout disallowance.

In para 10.6, the Commissioner of Income Tax (Appeals), recorded thus, “As held above, it is clear that the appellants have made purchases from elsewhere, but have obtained bills from the impugned suppliers. From the Trading & P & L account and Audit report it can be seen that the GP rate shown by appellant is 1.85% oil sales. In such circumstances the disallowance of 100% of purchases cannot be justified. Also as held above, the appellant would nave indulged in above practice in order to get some benefit. And it is this benefit derived by the appellant that need to be taxed. What would be the magnitude of benefit derived by the appellant is the mute question. In the appellant’s case, it is seen that GP rate shown is

0.78%”.

5.1 The final view was expressed in para 10.10, “Fol