ACIT Vs Utkarsha Vivek Parkar (ITAT Mumbai)
AO treated entire purchases ₹28.28L as bogus u/s 69C based on hawala info & made 100% addition. CIT(A) restricted to 12.5%.
ITAT held:
- Sales not doubted → entire purchases cannot be disallowed: Once sales are accepted, corresponding purchases must exist
- At best grey market purchases – only profit element taxable
- 12.5% estimation upheld: Consistent with past years & avoids unrealistic GP/NP
- HC rulings (Kanak Impex / Drisha Impex) distinguished: Those were cases of complete failure / no evidence
Result: Revenue appeal dismissed – only 12.5% addition sustained, not 100%
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the Revenue is directed against the order passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]by the Ld. Addl./JCIT(Appeals), Panchkula from the office of the Commissioner of Income Tax(Appeal) [hereinafter referred to as “CIT(A)”] dated 21.08.2025, arising from the assessment order passed by the Assessing Officer under section 143(3) read with section 147 of the Act dated 20.12.2018 for Assessment Year 2011-12.
2. The brief facts of the case are that the assessee is an individual engaged in proprietary business under the name Neoimage CTP, which is stated to be engaged in supplying printing plates to customers who are mainly offset printers. During the year under consideration the assessee derived income from business and profession. The assessee filed her return of income for A.Y. 2011-12 on 28.09.2011 declaring total income of Rs. 27,38,943/-. The return of income was processed under section 143(1) of the Act on 17.08.2012.
