Bombay High Court

THE COMMISSIONER OF CGST PUNE-II COMMISSIONERATE- 27versusJATIN DALICHAND GOSALIA

Decided: 25 June 2026
Disposal: DISPOSED OFF
Bench: SUMAN SHYAM ADVAIT M SETHNA

Holding

Because the Revenue did not file an appeal against the CIT (Appeals) order, it is precluded from challenging the Tribunal’s 10% addition under Section 69C, and the appeal is dismissed.

Summary

The Commissioner of Income Tax appealed to the Bombay High Court under Section 260A of the Income Tax Act, 1961, challenging an Income Tax Appellate Tribunal (ITAT) order that reduced the addition for bogus purchases to 10% of the amount under Section 69C. The Revenue had earlier obtained an order from the Commissioner of Income Tax (Appeals) directing a 12.5% addition, but it did not file any appeal against that order. The ITAT further reduced the addition to 10% and the Revenue sought enhancement of the amount before the High Court. The appellant argued that, following the precedent of Principal Commissioner of Income‑Tax v. Ravindra Bhaskar Deshmukh, the Revenue was precluded from raising any issue because it had not appealed the CIT (Appeals) order. The Court agreed, holding that the Revenue could not question the percentage fixed by the Tribunal and that no substantial question of law arose. Consequently, the appeal was dismissed.

Issues considered

Whether the Revenue is barred from challenging the ITAT’s determination of a 10% addition under Section 69C because it did not appeal the order of the Commissioner of Income Tax (Appeals).
Whether the Tribunal’s fixation of the percentage of addition is open to review by the Revenue in a subsequent appeal.

Legislation cited

Income Tax Act, 1961 — s. 260A, 69C

Subjects

income tax
bogus purchases
section 69C
section 260A
ITAT
CIT Appeals
preclusion
percentage of addition

Judgment

                                                                     9 ITXA 2109-19-OS..DOC




                                                                                 Priya Soparkar

                              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  ORDINARY ORIGINAL CIVIL JURISDICTION
                                   INCOME TAX APPEAL NO. 2109 OF 2019
                      The Pr. Commissioner of Income Tax-27                  …Appellant
                            Versus
                      Jain Dalichand Gosalia                               …Respondent

                      Mr. Arjun Gupta, for the Appellant.

                                           CORAM:        SUMAN SHYAM &
                                                         ADVAIT M. SETHNA, JJ.
                                           DATED:        25th JUNE 2026.
                      PC:-



                      1.     Heard Mr. Arjun Gupta, learned counsel appearing for the
                      Appellant.

                      2.     This appeal has been preferred under Section 260A of the
                      Income Tax Act, 1961, against the judgment and order dated 20 th
                      December, 2018, passed by the learned Income Tax Appellate
                      Tribunal (for short “I.T.A.T”), Mumbai in Appeal No.2555/
                      Mum/2018 (A.Y. 2009-10), whereby, the appeal preferred by the
                      Assessee/Respondent was partly allowed. The crux of the mater is
                      that, by the assessment order dated 20th December, 2018, the
                      Assessing Officer had made addition of Rs.38,13,697/- being
                      unexplained expenditure under Section 69C of the Income Tax Act,
                      on account of the bogus purchases.

                      3.     The Assessee preferred appeal before the CIT(Appeals),
                      which had passed order dated 8th February, 2018, directing the
                      Assessing Officer to make addition of 12.5% of the bogus
PRIYA
RAJESH
SOPARKAR
Digitally signed by
PRIYA RAJESH
SOPARKAR
Date: 2026.06.29
10:22:08 +0530




                                                    Page 1 of 3
                                                 9 ITXA 2109-19-OS..DOC




purchases and restricted the addition to Rs.11,03,894/-. The
Revenue did not prefer any appeal against the order of the
CIT(Appeals). However, the Assessee had assailed the order dated
8th February, 2018 before the learned I.T.A.T. The appeal was
disposed of by order dated 20th December, 2018, by further
reducing the addition to 10% on account of the bogus purchase.

4.    The Revenue is before this Court by filing the present appeal
against the order dated 20th December, 2018, seeking enhancement
of the amount.

5.    Mr. Arjun Gupta, learned counsel for the Appellant while
addressing arguments has submitted in his usual fairness that
Revenue did not prefer any appeal against the order of the CIT
(Appeals). As such, in view of the order of the Co-ordinate Bench
of this Court passed in the case of Principal Commissioner of
Income-tax Vs. Ravindra Bhaskar             Deshmukh, (2025) 180
taxmann.com 569, the issue raised in the appeal would be covered
against the Revenue.

6.    After perusing the observations made in the order of the Co-
ordinate Bench in the case of Ravindra Bhaskar Deshmukh (supra),
we are also of the opinion that since the Revenue has not preferred
any appeal against the order of CIT (Appeals), hence, it will be
precluded from raising any question regarding the validity of the
percentage of addition fixed by the learned Tribunal at 10%. If that
be so, in our opinion, there is no substantial question of law which
would arise for consideration in this appeal.




                              Page 2 of 3
                                             9 ITXA 2109-19-OS..DOC




7.   The appeal is, therefore, dismissed.




(ADVAIT M. SETHNA, J.)                      (SUMAN SHYAM, J.)




                            Page 3 of 3

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