ITAT Mumbai Dismisses Revenue Appeal on Bogus Purchases; Upholds Deletion of ₹68.77 Lakh and ₹7.94 Crore Additions
Court / Authority
Income Tax Tribunal
Update / Judgement Date
25 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
Key Facts and Tribunal Findings
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, dismissed Revenue appeals for Assessment Years 2015–16 and 2017–18 in the case of M/s. Anantam, upholding deletion of additions made under Section 69C on account of alleged bogus purchases.
For AY 2015–16, the Assessing Officer had reopened the assessment based on information that the assessee had obtained accommodation entries from M/s R.K. Impex. An addition of ₹68.77 lakh was made under Section 69C, treating purchases as non-genuine. The CIT(A) deleted the addition on the ground that the assessee had furnished documentary evidence, including invoices, ledgers, and bank statements, which were neither rebutted nor independently verified by the Assessing Officer.
The Tribunal upheld the CIT(A)’s findings, noting that the Assessing Officer failed to conduct basic verification such as issuing notices under Section 133(6) or undertaking independent enquiry. It observed that the addition was based on general information without linking it to the assessee’s specific transactions.
For AY 2017–18, the Assessing Officer made a larger addition of ₹7.94 crore under Section 69C along with commission expenditure, alleging bogus purchases from multiple entities based on search findings. Despite the assessee furnishing voluminous documentary evidence, including purchase and sales records, bank statements, and registers, the Assessing Officer relied primarily on third-party statements and perceived discrepancies without conducting further verification or allowing cross-examination.
The Tribunal held that the assessee had discharged its onus by producing supporting evidence, and in absence of any contrary material or proper enquiry by the Assessing Officer, the additions could not be sustained.
Accordingly, both Revenue appeals were dismissed.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about Income Tax Tribunal
- What is the Income Tax Appellate Tribunal (ITAT)?
- The ITAT, set up in 1941, is the second appellate authority in direct tax matters and the final fact-finding body. It hears appeals against orders of the Commissioner (Appeals) and certain other authorities, through benches across India.
- What is the time limit to file an appeal before the ITAT?
- An appeal must be filed within two months from the end of the month in which the order is communicated. This rule has applied since 1 October 2024 and continues under the Income-tax Act, 2025. The Tribunal can condone delay for sufficient cause.
- Can the ITAT stay a tax demand?
- Yes. The Tribunal can stay recovery of a disputed demand while an appeal is pending, usually on deposit of a part of the demand or furnishing security. Stays are granted for a limited period, and the appeal is expected to be decided within it.
- Where does an appeal go after the ITAT?
- An appeal against an ITAT order lies to the High Court, but only on a substantial question of law. A further appeal lies to the Supreme Court.
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- Post your requirement on White Collar Professional to receive proposals from verified Chartered Accountants and tax Advocates, compare them, and pay securely through the platform. This page also tracks the latest ITAT ITAT orders as they are reported.
