PCIT Vs Mohit Pukhraj Kawdiya (Gujarat High Court)
High Court Dismisses Revenue’s Appeal: Tribunal’s Restriction of Disallowance to 6% on Bogus Purchases Upheld Following Precedent in Assessee’s Own Case
The Gujarat High Court dismissed the Revenue’s tax appeal filed under Section 260A of the Income Tax Act, 1961, for Assessment Year 2013–14, thereby upholding the order of the Income Tax Appellate Tribunal, Surat. The appeal challenged the Tribunal’s decision restricting the disallowance on alleged bogus purchases to 6 percent instead of the 100 percent addition made by the Assessing Officer. The Revenue contended that the purchases were sham transactions routed through bogus entities of the Bhanwarlal Jain Group, which were allegedly engaged in providing accommodation entries, and argued that the entire amount of such purchases should be added to the assessee’s income.
During the hearing, the Revenue fairly conceded that the Tribunal had passed a common order covering Assessment Years 2011–12 to 2013–14 in the assessee’s case and that the High Court had already dismissed the Revenue’s appeal for Assessment Year 2011–12 on identical facts. It was therefore submitted that the same outcome should follow for the present year as well.
The High Court examined its earlier order and reproduced relevant extracts. It noted that the Tribunal had dismissed the Revenue’s appeals by relying on binding precedents, including a coordinate bench decision and a prior judgment of the jurisdictional High Court. The Tribunal had held that there was no change in facts or law across the relevant assessment years and therefore followed the earlier decisions.
