The assessee, Kanak Impex (India) Ltd., engaged in trading of iron and steel . The original assessment was completed under section 143(3) Subsequently, the case was reopened under section 147 based on information from DGIT (Inv.), Mumbai\/Sales Tax Department regarding bogus purchases. Due to non-compliance, an order under section 144 r.w.s. 147 was passed, adding the entire amount of \u00a0purchases\u00a0 \u00a0as bogus purchases since the assessee failed to prove the\u00a0 genuineness under section 69C of the Act .\u00a0 On appeal, the CIT(A) upheld the reassessment proceedings, rejecting the assessee\u2019s contention of non-service of notice, and confirmed the addition of bogus purchases. However, instead of sustaining the entire addition, the CIT(A) estimated 12.5% of the bogus purchases as taxable profit, relying on CIT v. Simit P. Sheth. (2013) 356 ITR 451 (Guj)( HC)) Both the revenue and the assessee appealed before the ITAT. The revenue contended that the entire bogus purchases should be disallowed, while the assessee challenged the estimation. The Tribunal, relying on PCIT-17 v. Mohammad Haji Adam & Co. (2019) 103 taxmann.com 459 (Bom.)( HC) \u00a0directed the AO to restrict the addition to the extent of bringing the GP rate of disputed purchases in line with genuine purchases. The Revenue appealed to the Bombay High Court, while the assessee did not file an appeal. The High Court held that the assessee failed to prove the genuineness of purchases and merely provided details of sundry debtors and creditors in the original assessment which did not absolve them from proving the purchases during reassessment. The Court held\u00a0 that the CIT(A) and ITAT misdirected themselves by estimating profits instead of confirming the full addition. Accordingly, the High Court allowed the revenue\u2019s appeal, restored the AO\u2019s order. The honourable Supreme Court dismissed the SLP of the assessee. \u00a0SLP (CIVIL) Diary No. 47369\/2025 dt. 21-11 -2025 )\u00a0 \u00a0( AY.\u00a0 2009-10)<\/p>\n
\u00a0<\/strong><\/p>\n \u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" S. 69C: Unexplained expenditure \u2013 Bogus purchases \u2013Information from Sales- Tax Department – Failure to prove genuineness of purchases \u2013Order of the Appellate Tribunal holding that only profit estimation at 12. 5% was set aside \u2013 Order of the Assessing Officer confirming the addition of entire purchases a bogus under section 69C of the Income -tax Act was affirmed by High Court – SLP of assessee dismissed . [S.69C 133(6), 143(3), 144, 147, 148, Art . 136 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-57623","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-eZp","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=57623"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57623\/revisions"}],"predecessor-version":[{"id":57624,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57623\/revisions\/57624"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=57623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=57623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=57623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}