IN THE INCOME-TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.6054/MUM/2025 (A.Y. 2018-19)

Luvkesh Textile Industries Pvt. Deputy Commissioner Ltd. of Income Tax Circle

201, Maxheal House, Swami 4(2)(1)

Vs.

Ayyappa Mandir Marg, Bangur Aayakar Bhavan, Nagar, Goregaon West, Maharishi Karve Road, Mumbai - 400104 Mumbai - 400020 PAN: AAACL7421K (Appellant) (Respondent)

ITA No. 5924/MUM/2025 (A.Y. 2018-19)

Deputy Commissioner of Lukesh Textile Industries Income Tax Circle Private Limited

4(2)(1) Vs. 21/22 A Chunawal Ind Estate, 640 Aayakar Bhavan, Condivita Lane, Andheri East, Maharishi Karve Road, Mumbai - 400020 Mumbai - 400020 PAN: AAACL7421K (Appellant) (Respondent)

Present for:

Assessee by : Shri A. L. Sharma, AR Revenue by : Shri Surendra Mohan, Sr. DR Date of Hearing : 04.12.2025 Date of Pronouncement : 27.01.2026 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The instant appeals have been preferred by both the assessee and the Revenue which emanate from the appellate order passed by the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as “CIT(A)”] with regard to the assessment order passed under section 147 r.w.s. 144 of the Income Tax Act 1961, (in short ‘the Act’) dated

22.03.2024 A.Y. 2018-19.

2. The Revenue has raised following grounds of appeal :

“1. Whether on the facts and circumstance of the case Ld. CIT(A) has justified in restricting the addition made on account of bogus purchase at 12.5% of such bogus purchases, without appreciating the facts that there was no physical delivery of goods and the purchases claimed by the assessee are nothing but accommodation entries.

2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition u/s 69C to the extent of 12.5% of such bogus purchases as against the entire bogus purchases added by the AO without considering the position of law established by the Hon'ble Apex Court in the case of N.K. Proteins Ltd, which has been recently followed 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 & PCIT vs Disha Impex Pvt Ltd dated 07.04.2025, that 100%

disallowance on bogus purchase is upheld".

2.1 The Assessee has raised following grounds of appeal :

“1) On the facts and in the circumstances of the case, the LD CIT(A) erred in upholding disallowance on account of purchases @ 12.5% of 8,16,24,351/- without appreciating full facts of the case and without giving proper opportunity in the matter.”

3. The appeals are against the assessment order , wherein an addition of Rs.8,16,24,351/- was made on account of alleged non-genuine purchases from certain parties suspected to be engaged in issuing accommodation entries. The assessee is engaged in the business of trading in fabrics. During the year under consideration, it made purchases from several parties, including M/s Rathi Style and Textile Pvt. Ltd., M/s Worldstar Fabrics LLP, M/s One World Design Studio Pvt. Ltd., M/s One World Sourcing, and M/s Tissori India Fabrics Pvt. Ltd. As per the information received from the Investigation wing of the Department, M/s. One World Group entities were involved in bogus purchase and bogus sales transactions wherein no actual goods were supplied/transferred. During the course of search proceedings, based on the evidence gathered and statements recorded, it was established that One World Group entities were involved in bogus purchase and bogus sales transactions wherein no actual goods were supplied/transferred. Shri Urvil Jani in his statement admitted that One World Group Entities were involved in bogus purchase and sales transactions. Shri Gopal Bhatter during his statement has also stated that these companies had no business and were entities for providing accommodation entries. The assessee was provided with a copy of statement recorded from Mr Urvi Jain. Since