M/S JHS Sevendgaard Laboratories Ltd. Vs. DCIT

Parties Involved

Facts Summary

The Assessee, M/S JHS Sevendgaard Laboratories Ltd., was engaged in the business of manufacturing toothpaste and brushes for the year under consideration. The case of the Assessee was reopened, and an assessment order was passed on 31/03/2023 under Section 147 of the Income Tax Act, 1961, by computing the total income of the Assessee at Rs. 1,00,01,240/- by making an addition of Rs. 11,05,348/- being 2% of total alleged bogus sale as commission received and Rs. 89,95,892/- on account of alleged bogus purchase thereby disallowing the same under Section 37 of the Act. Aggrieved by the assessment order dated 31/03/2023, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 31/03/2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 31/03/2025, the Assessee preferred the present Appeal on the grounds mentioned above.…

Legal Issues

• 1. Whether the Ld. CIT(A) has erred in law as well as on facts in not quashing the assessment order dated 31.03.2023 passed under section 147 r.w.s 144B by Ld.AO, which is beyond jurisdiction, bad in law and void ab initio.
• 2. Whether the Ld. CIT(A) has erred in law and on facts in upholding the validity of reassessment proceedings initiated under section 147 of the Act, despite the absence of any fresh tangible material or valid 'information' as required under section 148 and Explanation 1 thereto.
• 3. Whether the Ld. CIT(A) has erred in law and on facts in not being able to establish any live link/nexus between the information provided and the allegation of income escaping assessment.
• 4. Whether the reassessment proceedings initiated are bad in law as the notice under section 148 of the Act dated 25.03.2022 was issued by the Jurisdictional Assessing Officer in violation of provisions of section 151A of the Act, read with Notification No. 18/2022 dated 29.03.2022.
• 5. Whether the CIT(A) has erred on facts and in law in confirming the addition of Rs. 11,05,348/- by estimating 2% commission on alleged bogus sales of Rs. 5,52,67,414/- to M/s Veekay Enterprises without any credible basis.
• 6. Whether the CIT(A) has erred on facts and in law in sustaining the disallowance of Rs.88,95,892/- on account of alleged bogus purchases from Shri Gagan Singh (Prop. M/s Royal International), ignoring that the said purchases were supported by proper invoices, purchase orders, payment through banking channels, stock records, and consumption details.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• PERIYA AGOUNDER RAMASAMY v. ITO Ward-1(6), SALEM

• Sunder Nagar Satsang Sabha Vs. CIT (Exemptions)

  Mumbai Bench benchAY 2025-26Allowed

• Income Tax Officer, New Delhi Vs. Advermark Wiresmith Pvt. Ltd.

• Emaar India Limited Vs. DCIT

  Delhi Bench 'B', New Delhi benchAY 2015-16Allowed

• Income Tax Officer, Ward-3(1)(1), Ahmedabad Vs. 7NR Retail Ltd.

  Ahmedabad bench

• The A.C.I.T Vs. Index Securities & Research Pvt Ltd

  Delhi ‘C’ Bench benchAY 2011-12Dismissed