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IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH MUMBAI

BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER

AND

SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

ITA No. 1672/MUM/2025

Assessment Year: 2011-12

Vaibhav Nandkishor Patil, Income Tax Officer 3 (4), Kalyan,

C-602, Patel Heritage, Mumbai

Sector, Kharghar Maharashtra -421301

Vs.

Mumbai

Maharastra-410210

(PAN: AMXPP0196M)

(Appellant) (Respondent)

Present for:

Assessee : Shri Mehul Shah, CA

Revenue : Shri Praveen Salunkhe, Sr. DR

Date of Hearing : 13.10.2025

Date of Pronouncement : 31.12.2025

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of

ADDL/JCIT(A), Panchkula, vide order no. ITBA/APL/S/250/2024-

25/1073638541(1), dated 24.02.2025, passed u/s. 250 of the Income-

tax Act, 1961 (hereinafter referred to as the “Act”) against the

assessment order u/s. 143(3) r.w.s. 147 by ITO Ward 3(2), Kalyan,

dated 23.02.2015, for Assessment Year 2011-12.

2. Grounds taken by the assessee are reproduced as under:

1. On the facts, and in circumstances of the case, and in law, learned

Commissioner of Income-tax (Appeal) erred in upholding action of the Assessing

Officer in disallowing the entire alleged Bogus Purchases of Rs.15,47,224

without making any independent inquiry by treating the purchases as bogus in

nature on mere suspicion that the parties were listed on website of MVAT

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ITA No. 1672/Mum/2025

Vaibhav Nandkishor Patel

AY 2011-12

Department as Suspicious dealers, and without appreciating the fact that the

material sourced was in fact supplied/utilised in course of providing event

management services at cost by way of reimbursement, and the Appellant in

fact was entitled to and in receipt of fees for his services only.

2. Alternatively, on the facts, and in circumstances of the case, and in law,

learned Commissioner of Income-tax (Appeal) while upholding action of the

Assessing Officer in disallowing the entire alleged Bogus Purchases of Rs.

15,47,224 erred in not appreciating that what could at the best be disallowed

was an appropriate profit percentage embedded in such sales, and not entire

purchase.

3. On the facts, and in circumstances of the case, and in law, learned

Commissioner of Income-tax (Appeal) erred in upholding action of the Assessing

Officer in disallowing various Expenses debited to Profit and Loss account on

adhoc basis @ 20% amounting to Rs 56,569.

3. Brief facts of the case are that the assessee is engaged in the

business of event management under his proprietary concern in the

name and style of M/s. Evepro. Assessee filed his return of income on

25.09.2011, reporting total income at Rs. 7,31,202/-. Ld. AO received

certain information from the office of DGIT (Inv.), Pune relating to Sales

Tax Department, Mumbai which had unearthed racket involving more

than 1935 hawala dealers engaged in issuing bogus invoices to allow

traders to claim tax credit of Maharashtra Value Added Tax (MVAT).

Based on this information, ld. AO noted that assessee is one of such

beneficiaries who has inflated the purchase by obtaining bogus

purchase bills from the hawala dealers. Details in this respect is tabled

as under:

Name of hawala TIN of hawala PAN of hawala Amount of Bill

dealer dealer dealer (Rs.)

Adinath 27880705721V BXIPs3607M 15,47,224/-

Enterprises

Total 15,47,224/-

3.1. Based on this information, proceedings under section 148 of the

Act were initiated, alleging that purchase of Rs. 15,47,224/- are

accommodation entries and not genuine which has escaped

assessment. Notice under section 148 was issued on 05.04.2013.

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ITA No. 1672/Mum/2025

Vaibhav Nandkishor Patel

AY 2011-12

Subsequently, statutory notices under Section 142(1) were issued on

the assessee seeking explanation in this regard, which were duly

complied with. Assessee submitted that it maintains regular, books of

accounts which are subjected to tax audit. He filed audited financial

statements along with tax audit report. Total sales reported by the

assessee is of Rs. 60,42, 291/- on which he earned gross profit of Rs.

13,97,64