Ramniklal and Sons v. ITO
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Case in 2 minutes
The judgment addresses the issues identified in the case record.
Case snapshot
Sections / provisions: 68; 69C
Questions before the Court / Tribunal
- See the source-driven case record below.
Material facts and background
9. The AO has erred law and on facts in not considering the various judicial pronouncements which are in favour of Assessee and also erred in law in not distinct the facts of the case decision on which it relied upon for making an impugned addition 10. The A.O. failed to appreciate the facts that the profit margin in diamond industry ranges, between 1%-3% as per the study of the Task Force- Government of India. 11. The A.O. has erred in making the addition on the ground that the Assessee firm has failed to satisfy the condition of Section 68 of the Act. 12. The Commissioner (Appeals) erred in disposing of the appeal of the Assessee firm on 15-01-2024 on the ground of no material available on record to warrant interference in the order of the AO as the partner of the Assessee firm was not in knowledge of receipt of such appellate notices as he has a limited access to messages and e-mails due to his bad health associated with old age and therefore, he could never informed his Chartered Accountants about any dates of hearing fixed by the Commissioner (Appeals) so as to appear and represent the case before the it 13. The Order of A.O. passed u/s 143(3) rwis 147 of the Act computing...
Brief facts stated from the records are that assessee is a
partnership firm engaged in the business of trading and manufacturing in gold and diamonds Jewellery and has dealt in number of items as per the specification by its customers. Assessee filed its return of income on 30.09.2010 reporting total income at Rs.16,99,510/-. Case of the assessee was re-opened for the first time by issuing notice u/s 148 of the Act dated 05.03.2015. The reason for reopening of the assessment was for alleged bogus purchases made by the assessee from a party name called M/s. Daksh Diamonds for Rs.10,27,140/- pertaining to Shri Bhanwarlal Jain Group. The ld. Assessing Officer passed the assessment order dated 11.03.2016, wherein the ld. Assessing Officer made an addition of Rs. 30,814 being 3% of the alleged bogus purchase amount of Rs. 10,27,140/-.
3.1. Subsequently, the case of the assessee was re-opened for the second time by issuing notice u/s 148 of the Act dated 30.03.2017. The
4 ITA No.1192/Mum/2024 Ramniklal & Sons, AY 2010-11
assessee was provided the reason for re-opening of the said assessment. In the said reason for re-opening, the ld. Assessing Officer stated that the Assessing Officer received an information from the O/o the DGIT(Investigation), Mumbai that search and seizure action was conducted in case of Shri Bhanwarlal Jain Group by investigation wing, Mumbai and the ld. Assessing Officer formed a reason to believe that the assessee has availed accommodation entries from the parties namely, M/s. Daksh Diamonds for Rs.10,27,140/-, M/s Krishna Diam Rs.43,43,480/- and M/s Rajan Gems for Rs.6,95,160/-, totalling to Rs.60,65,780/-.
3.2. Ld. Assessing Officer completed the second assessment by passing an order u/s.143(3) r.w.s. 147 of the Act by making an addition of Rs.60,65,780/ to the total income of the assessee, u/s. 68 and 69C of the Act, by holding purchases made from M/s. Daksh Diamonds, Krishna Diam and Rajen Gems as bogus. Aggrieved, assessee went in appeal before the CIT(A).
Appellant / assessee submissions
The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.
Revenue / respondent submissions
The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.
Court / Tribunal analysis and reasoning
9. The AO has erred law and on facts in not considering the various judicial pronouncements which are in favour of Assessee and also erred in law in not distinct the facts of the case decision on which it relied upon for making an impugned addition 10. The A.O. failed to appreciate the facts that the profit margin in diamond industry ranges, between 1%-3% as per the study of the Task Force- Government of India. 11. The A.O. has erred in making the addition on the ground that the Assessee firm has failed to satisfy the condition of Section 68 of the Act. 12. The Commissioner (Appeals) erred in disposing of the appeal of the Assessee firm on 15-01-2024 on the ground of no material available on record to warrant interference in the order of the AO as the partner of the Assessee firm was not in knowledge of receipt of such appellate notices as he has a limited access to messages and e-mails due to his bad health associated with old age and therefore, he could never informed his Chartered Accountants about any dates of hearing fixed by the Commissioner (Appeals) so as to appear and represent the case before the it 13. The Order of A.O. passed u/s 143(3) rwis 147 of the Act computing...
therefore correctly restricted the additions limited to the extent of bringing the GP rate on purchases at the same rate of other genuine purchase.”
Operative decision and relief
In the result, the appeal of assessee is partly allowed.
Authorities and precedents appearing in the judgment
- Court of Bombay in the case of PCIT vs. Mohammed Haji Adam and Co
This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.
Ratio and legal principle
The decision turns on the statutory and factual issues recorded above. The operative result is classified as Partly Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.
Why this judgment matters
The case is relevant to taxpayers, advisers and litigators dealing with Income Tax. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.
Practitioner action points
- Build a transaction-level evidence file: confirmations, bank trail, invoices, ledger, tax/GST records and counter-party material rather than relying on a generic explanation.
- Where the addition depends on a third-party statement or investigation report, record the request for the relied material and cross-examination at the earliest stage.
- For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.
Do not over-read this case
- The packaged PDF is not yet an issuing-authority certified copy
- Apply the statutory law applicable to the relevant year; later amendments can change the result.
- Check whether a later High Court or Supreme Court judgment has affirmed, distinguished, reversed or superseded this decision.
Finin2min Judgment Intelligence
Decision support built around the judgment: reliance, fact match, Q&A, section impact, related-case network and practical next steps.
Can I rely on this judgment?
| Authority level | ITAT |
|---|---|
| Reliance effect | Tribunal precedent. Persuasive for similar facts; subject to the jurisdictional High Court and Supreme Court. Coordinate-Bench discipline should be checked. |
| Source integrity | A sanitized local full-text judgment copy is packaged; official-primary replacement remains pending. |
| Subsequent history | Subsequent appellate history is not fully closed in the current ledger. Recheck before filing or opinion work. |
| Finin2min status | Later-history check open |
Does this case match your facts?
Stronger match when
- Your dispute raises the same core issue: the principal issue.
- The same statutory provisions or materially equivalent provisions apply: 68, 69C.
- Your matter is at a comparable the same procedural and factual stage stage.
- Your documentary/evidentiary record is materially similar to the facts the ITAT Mumbai considered: 9.
- The same legal regime or assessment-period rules relevant to AY 2010-11 apply to your matter.
Weaker / distinguishable when
- A later Supreme Court or jurisdictional High Court ruling changes the legal position.
- The statutory provision was amended for your year or transaction.
- Your evidence, transaction structure, notice chronology or procedural stage differs on a fact the judgment treated as material.
- The case succeeded on a narrow jurisdictional/procedural defect that the authority has cured in your matter.
Questions this judgment answers
What was the main dispute in Ramniklal and Sons?
The judgment addresses the issues identified in the case record.
Which facts mattered most to the result?
9. The AO has erred law and on facts in not considering the various judicial pronouncements which are in favour of Assessee and also erred in law in not distinct the facts of the case decision on which it relied upon for making an impugned addition 10. The A.O. failed to appreciate the facts that the profit margin in diamond industry ranges, between 1%-3% as per the study of the Task Force- Government of India.
What did the ITAT Mumbai ultimately decide?
In the result, the appeal of assessee is partly allowed.
What legal principle can be taken from this judgment?
The decision turns on the statutory and factual issues recorded above. The operative result is classified as Partly Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.
Which provisions should be checked before relying on the case?
The case engages 68, 69C. The relevant statutory version for AY 2010-11 should be checked together with any later amendment, notification, circular and controlling higher-court authority.
When is this judgment most useful to a taxpayer or adviser?
The case is relevant to taxpayers, advisers and litigators dealing with Income Tax . Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.
What could make this judgment distinguishable or unsafe to rely on?
The packaged PDF is not yet an issuing-authority certified copy Apply the statutory law applicable to the relevant year; later amendments can change the result. Check whether a later High Court or Supreme Court judgment has affirmed, distinguished, reversed or superseded this decision.
Can this judgment be cited as current law without another check?
Tribunal precedent. Persuasive for similar facts; subject to the jurisdictional High Court and Supreme Court. Coordinate-Bench discipline should be checked. Subsequent appellate history is not fully closed in the current ledger. Recheck before filing or opinion work. A sanitized local full-text judgment copy is packaged; official-primary replacement remains pending.
Section / provision impact
- 68 — 68 is part of the statutory framework considered in the context of the dispute. Read the exact provision applicable to the relevant year with the Court/Tribunal reasoning.
- 69C — 69C is part of the statutory framework considered in the context of the dispute. Read the exact provision applicable to the relevant year with the Court/Tribunal reasoning.
How the decision changes your analysis
Before using this authority, frame the issue under 68, 69C and identify the decisive facts/evidence. The result should not be assumed from the case title alone.
The decision turns on the statutory and factual issues recorded above. The operative result is classified as Partly Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.
Tribunal precedent. Persuasive for similar facts; subject to the jurisdictional High Court and Supreme Court. Coordinate-Bench discipline should be checked. Subsequent appellate history is not fully closed in the current ledger. Recheck before filing or opinion work.
Case network: similar and different outcomes
Authorities appearing in this judgment: Court of Bombay in the case of PCIT vs. Mohammed Haji Adam and Co
Closest related cases in the Finin2min repository
Related cases with a different result
Related-case links are repository similarity connections, not a claim that one judgment cites or overrules another. Use the cited-authority list and later-history check for formal precedent analysis.
Working-paper citation
Full judgment and source trail
Read / download the clean local judgment copy
| Packaged source class | SANITIZED_LOCAL_FULL_JUDGMENT_COPY_PRIMARY_PENDING |
|---|---|
| Pages | 6 |
| SHA-256 | 5cd742aaef268c46fecbd5cd6e116d1187b35494a396457a7a64697cf6468a64 |
| Original source URL | Not exposed publicly. Original provenance retained only in the private source-closure ledger. |
| Source authentication | Sanitized local full-text copy - official primary replacement pending |