Jammu Pigments Limited Vs DCIT (ITAT Delhi)
Delhi ITAT Deletes ₹11.89-Crore Bogus-Purchase Additions: Toll Records Proved Actual Movement of Goods
Summary: The Delhi ITAT allowed the appeals of Jammu Pigments Limited for AYs 2012-13 and 2017-18, deleting additions made on account of alleged bogus accommodation-entry purchases. For AY 2012-13, the Assessing Officer had made an addition of ₹5,82,81,686 under Section 69C, principally relying on the Investigation Wing report and the supplier’s non-compliance with notices. The Tribunal found that the assessee had produced substantial documentary evidence, including purchase documents and government-issued J&K toll records establishing movement of goods across the border, and noted that the Assessing Officer had not rejected the books of account. Following the co-ordinate Bench decision in the assessee’s own case for AY 2018-19 in ITA No.6296/Del/2025 dated 08.07.2026, the Tribunal directed deletion of the entire ₹5,82,81,686 addition. The challenges to reopening under Section 147 and the denial of deduction under Section 80-IB were consequently treated as academic and kept open. For AY 2017-18, the Tribunal followed the same reasoning and directed deletion of the ₹6,00,07,130 purchase addition relating to Metal Impex, Proprietor Naveen Tayal. It also deleted the consequential ₹6,00,071 addition under Section 69C representing alleged 1% commission for obtaining accommodation entries, holding that the hypothesis failed once the underlying purchases were held to be genuine business purchases. Both appeals were accordingly allowed.
