ITA No. 494/RPR/2026

Parties Involved

Facts Summary

The assessee, Sunil Kumar Agrawal, LLP, filed an original Income Tax Return (ITR) for the Assessment Year 2021-22 declaring income of Rs. 23,66,07,770/-. The assessee was later searched under section 132 of the Income Tax Act, 1961, and incriminating documents were seized indicating that the assessee had taken various accommodation entries in the garb of purchases. The Assessing Officer (AO) issued summons to various suppliers, and their statements corroborated the non-genuineness of the purchases. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), who restricted the addition to profit element @12.5% of bogus purchases of Rs. 5,05,15,186/-. The Revenue has challenged the deletion of addition of Rs. 2,33,65,186/- made on account of bogus/non-genuine purchases.…

Legal Issues

• 1. Whether the Ld. CIT(A) was justified in deleting the addition of Rs. 2,33,65,186/- out of total addition of Rs. 5,05,15,186/- made by the AO on account of bogus purchases?
• 2. Whether the Ld. CIT(A) was justified in allowing the assessee's appeal by restricting the addition to profit element @12.5% of bogus purchases of Rs. 5,05,15,186/- and ignoring that the assessee has engaged in bogus billing/circular transactions?
• 3. Whether the Ld. CIT(A) erred in ignoring the fact that mere production of purchase invoices, ledger accounts, and banking transactions does not conclusively prove the genuineness of purchases when surrounding circumstances establish that the transactions were non-genuine?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

Similar Judgements

• Sumerlal K Sheth vs. Income Tax Officer

  Mumbai bench

• Income Tax Appellate Tribunal (SMC) Bench, Mumbai

  Mumbai bench

• JCIT (OSD), Circle-1, Raipur (C.G.) Vs. Balajee Loha Private Limited

  Raipur bench

• ITA No.6546/M/2024, ITA No.6549/M/2024, ITA No.6779/M/2024

  Mumbai Bench benchAY 2009-10, 2010-11, 2011-12Partly Allowed

• DCIT-1(1), Raipur Vs. M/s. Jagannath Enterprises

  Raipur bench

• ITA No. 5252/MUM/2024 (AY: 2011-12)

  SMC Bench, Mumbai benchAY 2011-12Dismissed