Sanjaykumar Hirachand Jain vs ITO – 19(3)(2) Mumbai

Parties Involved

Facts Summary

The assessee, Sanjaykumar Hirachand Jain, has been taking accommodation entries to inflate their purchases or expenses. The AO treated the purchases from Prerna Steel amounting to Rs.14,50,008/- as bogus and added the same as non-genuine purchases. The assessee carried the matter before the CIT(A), but without any success. The Hon'ble High Court of Bombay, in the case of PCIT v. Mohommad Haji Adam & Co. reported in [2019] 103 taxmann.com 459 (Bombay), held that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal was correct in restricting the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases.…

Legal Issues

• 1. Whether the CIT(A) erred in confirming the additions made by the AO in respect of bogus purchases.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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