Vinod Omprakash Kainya Vs ACIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has upheld the addition of Rs. 74,61,350 to the income of Vinod Omprakash Kainya, ruling that 25% of the assessee’s claimed total purchases were fictitious and arose from hawala transactions. The decision, pronounced on May 28, 2025, dismisses the assessee’s appeal against the order of the National Faceless Appeal Centre (NFAC)/CIT(A) for Assessment Year 2010-11, citing an absence of evidence to rebut the findings of the tax authorities.
The present appeal challenged the impugned order dated October 10, 2024, passed under Section 250 of the Income Tax Act, 1961. The core of the dispute revolved around an addition made by the Assessing Officer (AO) on account of non-genuine purchases.
According to the facts of the case, the reassessment proceedings were initiated based on information received from the Office of the Director General of Income Tax (Investigation), Mumbai. This intelligence indicated that the assessee was involved in inflating purchases through hawala parties. During the reassessment, it was specifically identified that the assessee had engaged in hawala transactions with four entities: VM Udyog, Shradhha Trading Co., Somnath International, and SB Metal Corp. The total transaction amount with these alleged hawala traders/bogus billers was recorded as Rs. 2,98,45,400.
