Sharad Jain Vs ITO (ITAT Surat)
Summary: The Surat Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal against the order dated 30.01.2026 passed by the Commissioner of Income-tax-NFAC, Delhi, which had confirmed penalty under Section 271(1)(c) of the Income-tax Act, 1961 for Assessment Year 2007-08. The penalty had originally been imposed by the Assessing Officer, Ward-3(3)(4), Surat, by order dated 29.03.2019. The penalty amount was Rs. 37,30,939/-.
The assessee-individual was engaged in the business of diamond. For AY 2007-08, the assessee had filed a return under Section 139, which was assessed. The assessment was subsequently reopened under Section 147 on the basis of information collected during a search conducted upon the “Bhanwar Lal Jain Group”, which allegedly revealed that the group was involved in providing accommodation by issuing non-genuine bills. The assessee was identified as one of the beneficiaries of such accommodation. During reassessment proceedings, the Assessing Officer observed that the assessee had made bogus purchases of Rs. 8,93,53,079/- and made an addition of Rs. 2,23,38,270/-, equivalent to 25% of the alleged bogus purchases.
On first appeal, the CIT(A) reduced the rate of addition from 25% to 12.50%, sustaining an addition of Rs. 1,11,69,135/-. The assessee thereafter preferred a further appeal before the ITAT in ITA No. 1390/Ahd/2017. As pointed out by the assessee’s Authorised Representative before the present Bench, the ITAT, Surat Bench, by order dated 18.07.2022, further reduced the addition from 12.5% to 6%.
