PCIT Vs SVD Resins & Plastics Pvt. Ltd. (Bombay High Court)
In the case of PCIT Vs SVD Resins & Plastics Pvt. Ltd., the Bombay High Court addressed an appeal by the revenue challenging the Income Tax Appellate Tribunal’s (ITAT) decision concerning the genuineness of purchase transactions under Section 69C of the Income Tax Act. The dispute involved purchases amounting to ₹1.34 crores from suppliers identified as non-genuine by the Sales Tax Department. The Assessing Officer (AO) added this amount to the assessee’s income, questioning the legitimacy of the purchases. The Commissioner of Income Tax (Appeals) [CIT(A)] partially upheld the AO’s decision but reduced the addition by estimating the profit at 12.5% of the purchases. The ITAT further upheld this estimation but rejected CIT(A)’s reduction of the gross profit margin. The High Court, after reviewing the evidence and procedures, found the AO’s approach of relying on general information without specific proof insufficient to label all transactions as bogus. The court emphasized the need for a thorough investigation by the AO, in consultation with the Sales Tax Department, before making such significant additions. Ultimately, the court upheld the ITAT’s ruling, stressing the importance of concrete evidence in cases involving alleged bogus purchases.
