PCIT Vs Jain Dalichand Gosalia (Bombay High Court)
The Bombay High Court dismissed the Revenue’s appeal under Section 260A of the Income-tax Act, 1961, arising from an ITAT order for AY 2009-10 concerning an addition for alleged bogus purchases under Section 69C. The Assessing Officer had originally made an addition of Rs. 38,13,697 as unexplained expenditure. On appeal, the Commissioner (Appeals) restricted the addition to 12.5% of the alleged bogus purchases, reducing it to Rs. 11,03,894. The Revenue did not challenge this order. The assessee thereafter appealed before the ITAT, which further reduced the addition to 10%. Before the High Court, the Revenue sought enhancement of the addition. The Court noted the Revenue’s admission that it had not appealed against the Commissioner (Appeals)’s order and, following an earlier coordinate bench decision, held that the Revenue was precluded from questioning the percentage of addition fixed by the Tribunal. Finding no substantial question of law, the Court dismissed the appeal.
Core Issue: The principal issue before the Bombay High Court was whether the Revenue could seek enhancement of an addition for alleged bogus purchases in an appeal against the Tribunal’s order when it had not challenged the earlier order of the Commissioner (Appeals), which had already granted substantial relief to the assessee.
