PCIT Vs J Kumar Infraprojects Ltd. (Bombay High Court)
The Bombay High Court dismissed the Revenue’s appeal, holding that it raised no substantial question of law. Although the tax effect was below ₹2 crore, the Revenue argued that the case involved bogus purchases and therefore fell within the exceptions under CBDT circulars. Without deciding whether such exceptions applied, the Court examined the matter on merits.
In the assessment, the Assessing Officer made a 100% addition in one transaction and a 20% addition in another. The Commissioner (Appeals) reduced both additions to 15%. On further appeal by the assessee, the Income Tax Appellate Tribunal quashed the additions, holding that no incriminating material was found during the search and, therefore, invocation of jurisdiction under Section 153A of the Income-tax Act was incompetent. The Tribunal relied on the Bombay High Court’s decision in Continental Warehousing Corporation (Nhava Sheva) Ltd.
The Revenue sought admission of the appeal on proposed substantial questions of law. The High Court rejected this request, observing that the Tribunal’s decision was squarely based on binding precedent. The Court noted that its ruling in Continental Warehousing Corporation (Nhava Sheva) Ltd. had been approved by the Supreme Court of India in Abhisar Buildwell (P.) Ltd., and that in similar circumstances it had earlier declined to admit another appeal.
