O R D E R

Per Arun Khodpia, AM:

The captioned appeal is preferred by the revenue against the order of Commissioner of Income Tax Appeals ADDL/JCIT (A) – 2, Noida [“the Ld. CIT(A)] dated 27.10.2025 for the assessment year 2009-10 arises from assessment order u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (“the Act”) dated 27.12.2019 passed by Income Tax Officer Ward – 1(1), Kalyan. The grounds raised by the revenue of appeal are as under:

1. On the facts and in the circumstances of the case Ld CIT(A) has failed to note that assessee has failed to produce material evidence as well as the purchase parties before the Assessing Officer during the first round of assessment proceedings/survey conducted in the case of assessee. In the second round also these parties have not responded to notices under section 133(6) issued by the Assessing Officer.

2. On the facts and in circumstances of the case, the CIT(A) erred in restricting the disallowance of purchases to Rs. 1,06,113/- out of total bogus purchases completely ignoring the line of argument taken by Ld CIT(A) in its order dated 31.12.2015 passed in the first round of appeal.

3. On the facts and in circumstances of the case, the CIT(A) erred in restricting the disallowance of purchases to Rs. 1,06,113/ out of total bogus purchases of Rs. 21,22,255/- from non-existent vendors by ignoring the decision of the Hon'ble Gujarat High Court in N.K. Industries Ltd. vs. Deputy Commissioner of Income-tax [2016] 72 taxmann.com 289 (Gujarat) and decision of jurisdictional High Court in the case of Principal Commissioner of Income-tax vs. Kanak Impex (India) Ltd. [2025] 172 taxmann.com 283 (Bombay), whereas SLP filed against both these cases have been dismissed by Hon'ble Supreme Court of India.

4. The appellant craves leave to add, amend or alter or alter any ground/grounds, which may be necessary

That present appeal is being filed as per an exception given in Para 3.1h of CBDT's Circular No.5/2024 dated 15.03.2024.”

2. Brief facts of the case are that the assessee company had filed return of income on 29.09.2009 declaring taxable income at Rs. “0”. The return was processed u/s 143(1). Thereafter, the regular assessment u/s 143(3) was completed on 21.12.2011, determining total loss at (Rs. 48,03,519/-). Subsequently, the case of assessee was reopened u/s 147, having information received from Sales Tax Department, Maharashtra regarding certain persons who had provided entries in the form of bogus purchases to large number of tax payers. On perusal of such information, it is found that the assessee herein was also in the list of beneficiaries, who had obtained bogus purchases bills from such entry providers. After proceedings u/s 147, the assessment u/s 143(3) r.w.s 147 was completed with an addition of Rs.21,22,255/- on account of bogus purchases. Assessee preferred an appeal before the Ld. CIT(A), wherein the appeal of assessee has been dismissed. Therefore, in order to take remedial actions, assessee preferred an appeal before the Income Tax Appellate Tribunal (ITAT), wherein the matter was set aside to the file of ld. AO with direction to examine the concerned parties. opportunity of cross-examination was given to the assessee. As the matter was set aside to the file of AO for giving an opportunity to assessee for cross-examination of the concerned parties, the notices u/s 133(6) of the Act were issued to the parties, however, all such notices were returned back unserved by the postal authorities except in a particular case of Shri Nirav Dedhia, proprietor of K.C. Enterprises, who denied any business with the assessee. In absence of response from the concerned parties, the Inspector of IT Department was directed to trace such parties, however, the Inspector of IT Department was also unable to locate the concerned parties at their given addresses. The assessee was show-caused to respond in aforesaid situation towards which a reply was submitted by the assessee, however, the contentions of a