IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &

HON’BLE SHRI PRABASH SHANKAR, ACCOUNTANT MEMBER ITA No. 8731/Mum/2025 (Assessment Year: 2011-12)

Income Tax Officer-19(1)(5), Vs. Hitesh Khimchand Jain Room No. 502, 5th Floor, 123 East, 1st FLR, Piramal Chambers , Shanti Bhawan, V.P.

Lalbaug, Parel, Road Mumbai - 400012 Mumbai - 400004 PAN GIR No. AFXPB7780C /

Applicant Respondent ( ) ( )

Assessee by None Revenue by Shri Brajendra Kumar (SR. DR.)

Date of Hearing 12.02.2026 Date of Pronouncement 09.03.2026 आदेश ORDER /

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the Revenue challenging the impugned order 06.10.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2011-12. The following grounds are reproduced below:

“1. Whether on the facts and circumstances of the case

and in law, the CITIA) arred in restricting addition on the

alleged bogus purchases without appreciating the fact that

AO made addition on the basis information was received

from the Sales Department Tax that the assesses was

beneficiary of hawala bilis or accommodation entries

either to inflate the purchases or expenses thereby reducing the tax liabilities.

2. "Whether on the facts and circumstances of the case and in law the CITTA) erred in restricting the addition made the AO of the alleged purchases of Re 8,15,196/- being 15% to Rs. 2,71,732/- 5% of the total purchases of Rs. 54,34,638/, without appreciating the fact that no actual goods were supplied by the parties to the assessed."

3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A), erred in restricting the GP rate to the extent of 5%, 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 fort of procuring bogus invoices leads to the un-verified inflation of purchase price by the assessee which cannot be compared with the regular GP of the books of accounts."

4. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the element of reasons for procuring of bogus, invoices when it was observed that GP on these bogus invoices were almost matching with the GP, as per genuine invoices and therefore, such estimation of income out of bogus purchases with GP, as per regular books of accounts is not justified".

5. "Whether on the facts and circumstances of the case and in law, the Ld. CITIA) has erred in holding that the addition was based on mere suspicion, surmises, and conjectures, ignoring the fact that the addition was founded on credible investigation inputs and corroborative evidence of bogus accommodation entries"

6. "Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) is perverse in not considering that the order of Hon'ble Supremis Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017, which is on the similar issue of bogus purchasen, was already the law of the land when the Ld. CITIA) has pronounced it's order on

06.10.2025."

7. "Whether on the facts and in the circumstarices of the case and in law, the Id. CITIA) has erred in restricting the addition without appreciating the fact that in the case of Mis. 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 Gujrat High Court and also by the Hon'ble Supreme Court".

8. "Whether on the facts and in the circumstances of the case and in law, the Ld. CITA) is erred in not considering the view expressed in 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 2