INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: SMC BEFORE HON’BLE BEENA PILLAI, JUDICIAL MEMBER AND HON’BLE ARUN KHODPIA, ACCOUNTANT MEMBER िनधा(cid:5)रण वष(cid:5)/Assmt. Year: 2009-10)

Permanent Account Number: AAEPP7085Q HANSU KUMAR PANDEY

35, SHIV SHANKER ITO INDUSTRIAL ESTATE, ASHAR IT PARK, THANE- Vs. BP ROAD BHAYNDER-

400604, MAHARASHTRA 401105 THANE-401105, MAHARASHTRA (अपीलाथ(cid:15) Appellant) ((cid:16)(cid:17)थ(cid:15) Respondent)

िनधा(cid:5)(cid:6)रती (cid:10)ारा/Assessee Shri Pramod Kumar Parida represented by:

राज(cid:12) व (cid:10)ारा/Revenue Shri Sandeep Jumale-Sr. DR represented by:

सुनवाई की तारीख / Date of conclusion of

29-Apr-2026 hearing:

घोषणा की तारीख / Date of pronouncement: 30/04/2026 आदेश / ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is filed by the Department against the order passed by the Learned Commissioner of Income Tax, Appeal, Addl/JCIT (A)-1 Gurugram, [hereinafter referred to as “the Ld.CIT(A)”] dated 16/12/2025 for the Assessment Year 2009-10, on the following grounds of appeal:

“1) a. On the facts and in circumstances of the case, the CIT(A) erred in restricting the disallowance of purchases to 12.5% of total bogus purchases of Rs. 7,70,422/- from non- existent vendors by not following the decision of the Hon’ble Bombay High Court in the cas of Kanak Impex (India) Ltd.

reported in 172 Taxmann.com 283.

b. It is submitted that present appeal may be filed in accordance with the CBDT’s Circular No.5/2024 dated 15.03.2024 as per Para 3.1c of the said Circular. The Order of the CIT(A) may kindly be vacated and the matter may be set-

aside to the file of the AO for fresh assessment.

c. The appellant craves leave to add, amend OR alter OR alter any ground/grounds, which may be necessary.”

2. Brief facts of the case are as under:

The assessee is an individual engaged in the business of manufacturing and trading of stainless steel jars used in mixers and grinders. For A.Y. 2009–10, the assessee filed return of income declaring total income of Rs.12,45,468/-. The case was reopened u/s 147 on the basis of information received from the Sales Tax Department that certain parties, including M/s R.K. Enterprises, were engaged in providing accommodation entries without actual delivery of goods.

2.1. During assessment proceedings, the Ld.AO observed that the assessee made purchases of Rs.7,70,422/- from the said party, which was listed as a hawala dealer. Relying upon statements and information from the Sales Tax Department, and in absence of satisfactory explanation from the assessee, the Ld.AO treated the entire purchases as non-genuine and added Rs.7,70,422/- to the income of the assessee.

Aggrieved, the assessee carried the matter in appeal before the Ld.

CIT(A).

3. Before the Ld. CIT(A), the assessee submitted that the purchases were duly recorded in the books, supported by invoices, delivery challans and payments through banking channels. It was contended that sales corresponding to such purchases were accepted by the Ld.AO and books were not rejected u/s 145. The assessee further submitted that no independent inquiry was conducted by the Ld.AO and addition was made solely on the basis of third-party information without granting opportunity of cross-

examination.

3.1. The Ld.CIT(A) upheld the validity of reopening on merits, observing that the assessee had produced partial evidences such as ledger account, bank statement and delivery challans; however, complete verification of payments was not established. At the same time, the Ld.CIT(A) noted that the Ld.AO had accepted the sales and had not rejected the books of account. Relying on judicial precedents in similar “hawala purchase” cases, the Ld. CIT(A) held that entire purchases cannot be disallowed and only profit element embedded in such purchases is liable to be taxed. Accordingly, the disallowance was restricted to 12.5% of the alleged bogus purchases, giving part relief to the assesse.

Aggrieved by the order of the Ld.CIT(A), the Revenue is in