D.G. Exports vs. Deputy Commissioner of Income Tax-23(1)

Parties Involved

Facts Summary

The assessee, D.G. Exports, filed its original return of income on 16-08-2011, which was processed under section 143(1) of the Income Tax Act, 1961. The case was reopened under section 147 of the Act based on information from DGIT (Inv.), Mumbai, indicating that the assessee had made certain accommodation entries amounting to Rs. 4,06,38,798/- from Bhanwarlal Jain Group. Despite the assessee filing a return of income in response to a notice under section 148 of the Act, the Assessing Officer (AO) found the provided information and documentation unacceptable. Consequently, the AO treated the purchases as bogus and assessed the income at Rs. 4,35,31,620/- under section 147 read with section 143(3) dated 06/12/2018. The assessee appealed to the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi, whose order was sustained. The assessee then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the entire purchases should be disallowed or only the Gross Profit rate should be taxed.
• 2. Whether the disallowance for the year under appeal should align with the established precedent of taxing only the Gross Profit rate at 3%.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• Niraj Pravinchandra Doshi Vs ITO,Ward-19(2)(4), Mumbai

  SMC Bench, Mumbai benchAY 2009-10Partly Allowed

• Inderjeet Kaur Vs. Income Tax Officer, Ward-71(3), New Delhi

• S R Jewels vs. Income Tax Officer

  Mumbai “SMC” Bench : Mumbai benchAY 2009-10Partly Allowed

• Ramasamy Sivaprakasam vs The DCIT, Central Circle-2, Trichy

  Chennai benchAY 2014-15 & 2016-17Dismissed

• Santosh Laujari Gupta Vs ITO – 33(3)(3)

  SMC Bench, Mumbai benchAY 2009-10Partly Allowed

• Nissim Traders Private Limited vs DCIT, Circle 2(3)(1), Mumbai

  SMC BENCH, MUMBAI benchAY 2018-19Dismissed