PCIT Vs Tejua Rohitkumar Kapadia (Gujarat High Court)
In the case of PCIT vs. Tejua Rohitkumar Kapadia, the Gujarat High Court dismissed a tax appeal filed by the Revenue challenging an order of the Income Tax Appellate Tribunal (ITAT) dated January 16, 2017. The core issue revolved around the disallowance of purchase expenses amounting to ₹5.19 crore, which the Assessing Officer had labeled as bogus. The Revenue’s contention was based on the statement of Shri Kulwant Singh Yadav, who allegedly ran a shroff business and admitted to providing cash in return for cheques—identifying the assessee as one of the beneficiaries. However, both the CIT(Appeals) and the ITAT found no substantive evidence linking the assessee to such a transaction chain.
The CIT(Appeals) allowed the assessee’s claim, observing that the purchases from M/s. Raj Impex were supported by proper bills, and all payments were made via account payee cheques. Importantly, the assessee had acted as a trader, and the goods purchased from Raj Impex were sold onwards, with the sales being accepted by the Assessing Officer. On further appeal by the Revenue, the ITAT reaffirmed the findings of the appellate authority. It emphasized that not only were the transactions confirmed by Raj Impex, but there was also no proof suggesting that the payment amounts had been returned to the assessee in cash.
