2025 (7) TMI 1580 - AT - Income Tax

Bogus purchases - estimation of income - CIT(A) restricted addition made at 12.5% of the gross profit on account of bogus purchases - HELD THAT - CIT(A) confirmed the said addition by respectfully relying on the judgment of PCIT v. S.V. Jiwani 2022 (10) TMI 173 - BOMBAY HIGH COURT . In deference to the binding precedent of the Hon ble jurisdictional High Court as well as in adherence to the principles of judicial discipline we find no reason to interfere with the impugned appellate order. Accordingly the order passed by the CIT(A) is hereby upheld.

Summary

The Appellate Tribunal (ITAT Mumbai) dismissed the revenue's appeal against the National Faceless Appeal Centre (NFAC), Delhi's order under section 250 of the Income-tax Act, 1961, for AY 2009-10. The Assessing Officer (AO) had disallowed purchases worth Rs. 3,73,60,738/- from entities linked to hawala dealers and added the entire amount to the assessee's income. The CIT(A) partially allowed the appeal by restricting the addition to 12.5% of the gross profit on such purchases, relying on the binding precedent of the Bombay High Court in PCIT v. S.V. Jiwani [(2022) 145 taxmann.com 230], and the Gujarat High Court in CIT v. Simit Sheth. The ITAT noted that the assessee did not challenge the 12.5% addition and, adhering to judicial discipline and binding High Court precedents, upheld the CIT(A) order. The appeal was dismissed ex parte against the assessee.