IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “J (SMC)” BENCH, MUMBAI BEFORE SMT BEENA PILLAI, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITO 19(3)(1), Room no 405, vs. Tagaram Ganesiiram Prajapati, 4Th floor, Piramal 51/11, Dhabi Building, Dr. MG Mahimtura Chambers, Parel, Mumbai- Marg, 3rd Kumbharwada opp. Durgadevi

400012. Garden, Mumbai-400004.

PAN/GIR No: AAKPPSIOID (Appellant) (Respondent)

Assessee by Ms. Pooja H. Chhawacharia Revenue by Shri Aditya Rai (SR DR)

Date of Hearing 24.03.2026 Date of Pronouncement 25.03.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the revenue emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of Income-Tax (Appeals), ADDL/JCIT (A)-3, Bengaluru [in short, ‘CIT(A)’], dated

26.11.2025 for the assessment year (AY) 2009-10.

2. The grounds of appeal raised by the revenue are as under:

“1. Whether on the facts and in the circumstances of the case and in law, the Learned CIT(A) was justified in restricting the bogus purchases at the rate of 12:5 percent as against the 100 percent addition on account of bogus purchases of Rs. 1,57,08,424/- obtained from four entities namely Shree Mahavir Enterprises, Reliant Metal Corp., Padmavati Metal and Alloys, Adino Trading Co. Pvt Ltd, though there was no dispute that the bogus purchases were made and so an act of infraction of law was committed in violation of section 74(1A) of the Maharashtra Value Added Tax Act, 2022 and therefore such expenses are not allowed as per express provision u/s 37 of the Act.

2. Whether on the facts and in the circumstances of the case and in law, the Learned CIT(A) was justified in estimating the income of bogus purchases based on 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 the accounts.

3. Whether on the facts and in the circumstances of the case and in law, the Learned CIT(A) was justified in ignoring the element of reason 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.

4. "Whether on the facts and in the circumstances of the case and in lase, the Id CITIA) while deciding the issue has ignored the fact that his order is perverse in not considering that the order of Hon'ble Supreme 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 purchases, was already the law of the land when the Ld. CITIA) has pronounced it's order on 26.11.2025.

5. Whether on the facts and in the circumstances of the case and in law, the L4. CITIA) has erred in restricting the addition without appreciating the fact that in the case of M/s. 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 Han ble Gujrat High Court and also by the Hon'ble Supreme Court.

6. "Whether on the facts and in the circumstances of the case and in law, the Id CIT(A) has 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 283 (Bombay Dated. 03.03.2025, wherein the decision of 100 percent addition made by AO has been allowed, by rejecting the ITAT's decision of estimating the profit rate @12.5 percent on bogus purchases and thereby impliedly granting deduction of such unexplained expenditure incurred u/s. 69C of the Act, even though the assess