IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VP &

MS PADMAVATHY S, AM I.T.A. No. 1299/Mum/2025 (Assessment Year: 2008-09)

Income Tax Officer-19(3)(1), Salem Steel Industries, 405, 4^th Floor, Piramal Chambers, 33, Sindhi Lane, Near Alankar Vs.

Lalbaug, Parel, Mumbai-400012. C inema, Maharashtra-400004.

PAN: AAOFS8839D Appellant) : Respondent Revenue / Appellant by : Shri Swapnil Choudhary, CIT-DR Assessee / Respondent by : None Date of Hearing : 11.09.2025 Date of Pronouncement : 22.09.2025 O R D E R Per Padmavathy S, AM:

This appeal by the Revenue is against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 06.12.2024 for Assessment Years (AY) 2008-09. The grounds raised by the Revenue are as under:

“1." Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against 100% addition of Rs. 37,35,984/- made by the AO u/s 69C of the Income-Tax Act, 1961, on account of bogus purchases from M/s. Shree Sundha Steels Pvt. Ltd and M/s. Metalex Tube Industries, both are found to be fictitious concerns, involved in providing on bogus bills for the alleged purchases purportedly made by the assessee ?"

2. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against 100% addition of Rs. 37,35,984/- made by the AО, on account of bogus purchases from M/s. Shree Sundha Steels Pvt. Ltd and M/s. Metalex Tube Industries, without appreciating the fact that action of AO was based on the information received from the DGIT (Inv.), Mumbai, subsequently through Sales Tax Deptt. Maharashtra, that Mr. Bhawarlal Jain & Syndicates, were providing accommodation entries in the form of issuing bogus Sales/Purchase Bills /Unsecured loans without supplying any goods and the assessee was found to be one of the beneficiaries who have obtained accommodation entries to inflate it's expenses and thereby suppress it's true profit ?"

3. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition to the extent @25% as against 100% addition made by AO, by ignoring the fact that during the Re- assessment Proceedings, the assessee could neither produce the quantity tally of day to day purchases/Sales/Stocks and corresponding values, Delivery Challans, lorry receipts etc. nor could prove the genuineness of alleged transactions and creditworthiness of parties for verification, in spite of ample opportunities provided by the Assessing Officer?

4. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against addition of 100% made by the AO of bogus purchases Rs. 37,35,984/-, by not justified in estimating the income of bogus purchases on the basis of comparing of the bogus purchases with the purchases in the regular books of accounts, ignoring that the fact of procuring bogus invoices leads to the unverified inflation of purchase price by the assessee which cannot be compared with the regular GP of the books of accounts?

5. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against addition of 100% of total purchases of Rs. 37,35,984/-, by ignoring the element of reasons for procuring of bogus invoices, when it is observed that the GP on these bogus invoices are almost matching with the GP as per genuine invoices and therefore such estimation of income out of bogus purchases with the GP as per regular books of accounts is not justified ?"

6. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the bogus purchases @ 25% as against 100% addition of total purchases of Rs. 37,35,984/-, though there