IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH MUMBAI BEFORE: SHRI PAWAN SINGH, JUDICIAL MEMBER &

SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No. 2048/MUM/2025 (AY:2012–13)

&

ITA No. 2049/MUM/2025 (AY:2014–15)

Income Tax Officer- Vs. Shemon Jewels

19(3) (1) EC-2083 2^nd Floor EC-2083

405, 4^th Floor, Piramal 2^nd Floor, Bharat Diamond Chambers, Parel, Lal Baugh, Bourse Bandra Kurla Complex Mumbai-400012 BKC Bandra, Mumbai-400051 PAN: AAKFS961F (Appellant) .. (Respondent Assessee by None Revenue by Shri. Virabhadra Mahajan, Sr. DR Date of Hearing 18/09/2025 Date of Pronouncement 19/09/2025 Order under section 254(1) of Income Tax Act PER ARUN KHODPIA, ACCOUNTANT MEMBER These appeals by the revenue are emerged from the order of Commissioner of Income Tax Appeals, NFAC (in short ‘Ld. CIT(A)’) u/s 250 of the Income Tax Act, 1961 (in short ‘The Act’) dated 16-01-2025 and 26-12- 2-24 for the assessment year 2012-13 and 2014-15, respectively, arises from the orders 143(3)/147 of the Act dated 16-12-2019 and 25-05-2023 passed by Income Tax Officer, 19(3)(3), Mumbai and National Faceless Assessment Unit (in Short ‘Ld AO).

2. Since, both the captioned appeals pertains to same assessee, having similar facts and circumstances under common ground of appeal by the revenue, these are heard together and disposed of by this common order.

3. ITA No. 2048/MUM/2025 has been taken up as the lead case, our observations and discussions therein shall apply mutatis mutandis to the other appeal in ITA 2049/MUM/2025.

4. The grounds of appeal in the lead matter, reads as under:

“1. “Whether the facts and circumstances of this case and in law, Id. CIT(A) has erred in restricting bogus purchase only to the extent upto 3% as against the 100% addition made by the AO, on account of bogus purchases transaction of Rs. 1,23,69,248/- with M/s Prime Star, identified as bogus/paper entity of Mr. Bhanwarlal Jain Group ?”

2. “Whether on the facts and circumstances of the case and in law, Ld CIT(A) has erred in restricting bogus purchase only to the extent upto 3% as against 100% addition of Rs. 1,23,69,248/-by ignoring the fact that action of Assessing officer was based on the information & discreet report of the DGIT (Investigation Wing) Mumbai, who has proved beyond doubt post search and seizure operations with the evidences & recorded statements of Mr. Bhanwarlal Jain that M/s Prime Star, was one of the paper company out of many concerns, managed & controlled with a sole purpose of providing accommodation entries of bogus purchases/sales & loans and the assessee firm was found to be one of beneficiary who has obtained accommodation entries of bogus purchases of diamonds without actual delivery and thus transaction were undertaken to generate paper tail only ?"

3. “Whether on the facts and circumstances of the case and in law, Lá CIT(A) has erred in restricting bogus purchase only to the extent upto 3% as against 100% addition of Rs. 1,23,69,248/, without appreciating the fact that during the Search operations conducted, no stock of diamonds or related materials pertaining to business was found and during the re assessment proceedings, the assessee has also failed to prove genuineness and creditworthiness of transactions as well as party vindication, by not producing the documents/evidences/delivery challans, stock registers etc, before Assessing officer ?"

4. “Whether on the facts and circumstances of the case and in Inus, the Ld CITIA) has erred ins restricting bogus purchase only to the extent upto 3%, by estimating the income of bogus Purchases on the basis of comparing of bogus purchases with the purchases in the regular books of accounts ignoring that the fact of procuring bogus invoices leads to the un-certified inflation of purchase price by the assessee which cannot be compared with the regular GP of the books of accounts?"

5." Whether in the facts and circumstances of the case, the Ld CIT(A) was justified in holding that income from bogus purchase transaction should be rest