IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No. 6131/MUM/2025 (AY: 2019-20)

(Physical hearing)

Income Tax Officer-19(1)(1), 501, 5th Floor, Piramal Chamber, Lalbaug, Mumbai	Vs	Babulal Mishrimalji Mehta 7 Marker Building, Office No.91ST Panjarapole Lane, Mumbai [PAN:AFBPM0921N]
Appellant / Assessee		Respondent / Revenue

Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER:

1. This appeal by Revenue is directed against the order of ld. CIT (A) dated

01.07.2025 for assessment year 2019-20. The Revenue has raised following grounds of appeal:-

“1. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 33,70,713/-made by the AO under section 69C of the Income tax Act, 1961, without appreciating that the assessee failed to explain the source and genuineness of the expenditure incurred purchases from non-existent parties"

2. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred by disregarding the credible and verifiable information available on the department's portal, which conclusively established that the suppliers of the alleged purchases were non-existent, and the transaction were not genuine,"

3. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that if the purchases were to be treated as non- existent, the corresponding sales would also have to be considered non- existent. This is contrary to established legal principles, as the addition was made under section 69C for unexplained expenditure, and the assessee failed to provide a plausible explanation for the same. The addition of unexplained expenditure is distinct from the treatment of sales."

4. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred by substituting its own opinion for the well-reasoned findings of the AO without any corroborative tangible concrete material evidence."

5. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), has erred in restricting the restricting the GP rate to the extent of 8%, without appreciating the decision of the Hon'ble Supreme Court in the case of M/s. N. K. Proteins Ltd. Va. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017. wherein the Hon'ble Court has held that once a findings of act has been given that entire purchases shown on the basis of fictitious invoices and debited in the P & L account are established as bogus, then restricting the addition to a curtained percentage goes against the principles of section 68 and 69C of the Income Tax Act, 1961."

6. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), has erred in restricting the addition without appreciating the fact that in the case of M/s. Swetamber Steels Ltd. (Supra), the Hon'ble ITAT, Ahmadabad had conformed 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."

7. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), has ignored the fact that, the Hon'ble ITAT is perverse in not considering the order of Hon'ble Gujarat High Court in case of N.K. Proteins Ltd (2016) 72 Taxman.co 289 (Guj.) relating on similar issue of bogus purchase, which have been confirmed by the Hon'ble Supreme Court big dismissing SLP in SLPICC) of 963/2017 dated 01 07 2025"

8. "Whether on the facts and circumstances of the case and in law, the decision of the Ld. CIT(A) was 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 A

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