ITAT Mumbai Dismisses Revenue Appeal in ₹2.21 Crore Bogus Purchase Reassessment Case

The “B” Bench of the Income Tax Appellate Tribunal, Mumbai, delivered its order on 25 February 2026 in the case of Nimesh Pravinchandra Mehta for Assessment Year 2013–14. The Revenue challenged the order of the CIT(A) which had quashed reassessment proceedings relating to alleged bogus purchases linked to the Bhanwarlal Jain group.

Reopening Based on Earlier Examined Material

The assessee, engaged in trading cut and polished diamonds, was originally assessed under Section 143(3), where purchases from certain parties were examined. The Assessing Officer had restricted disallowance to 3% profit margin on such purchases. Subsequently, relying on the same information from investigation proceedings concerning the Bhanwarlal Jain group, the AO reopened the assessment under Section 148 and treated the entire purchase amount of ₹2.21 crore as unexplained expenditure under Section 69C. The CIT(A) quashed the reassessment, holding that the reopening was based on the same material already examined during original scrutiny. It was therefore a case of “change of opinion.”