11-ITXA-2354-2019.DOC Chitra Sonawane. IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL(IT) NO. 2354 OF 2019 Pr. Commissioner Of Income Tax-2, Thane …Appellant. Versus Arvind Dwarkadas Purohit Prop. Ms. Soham Enterprises …Respondent Mr. Akhileshwar Sharma, for the Appellant. CORAM: SUMAN SHYAM & ADVAIT M. SETHNA, JJ. DATED: 25th JUNE 2026. PC:- 1. This Appeal is filed under Section 260-A of the Income Tax Act, 1961 ('IT Act' for short). It assails the Judgment and Order of the Income Tax Appellate Tribunal ('ITAT' for short) dated 2nd August 2018 ('Impugned Order' for short). 2. The Appeal is preferred on the following formulated substantial questions of law :- (i) Whether on the facts and circumstances of the case, the ITAT has erred in law by not appreciating the fact that the assessee could not establish the genuineness of the purchases from the non-existent PALLAVI MAHENDRA WARGAONKAR Digitally signed by PALLAVI MAHENDRA WARGAONKAR Date: 2026.06.30 10:37:20 +0530 11-ITXA-2354-2019.DOC vendor as per information received from Law Enforcement agency of State of Government of MAharasthra i.e. Sales Tax Department and established by the Assessing Officers. (ii) Whether on the facts and circumstances of the case, the Hon'ble ITAT has erred in law by not appreciating the fact that the onus to justify the claim of expenses is on the assessee and the same has failed to discharge it in relation to the purchases made from the non-existent vendor ? (iii) Whether on the facts and circumstances of the case, the Hon'ble ITAT was justified in not appreciating the law correctly that once the purchases are unverifiable/non genuine/bogus, the same should have been disallowed in entirety, particularly in view of the ratio of the decision of the Hon'ble Gujarat High Court in Tax Appeal No.242 of 2003 dated 20.6.2016 in the case of N.K. Proteins Ltd against which the SLP was dismissed by the Hon'ble Apex Court. 3. Mr. Sharma, learned Counsel for the Appellant/Revenue has contended that though the tax effect in the said Appeal is valued at Rs.10,21,276/-, it would fall within the exceptions stipulated in the letter issued by the Central Board of Direct Tax ('CBDT' for short) dated 20th August 2018 vide which, the earlier Circular dated 11th 11-ITXA-2354-2019.DOC July 2018 was modified. 4. On perusal of the letter dated 20th August 2018, it appears that the modification introduced therein to the CBDT Circular dated 11th July 2018 shall come into effect on the date of issuance of the same. In view thereof, no retrospective effect can be given to the exceptions stipulated in letter dated 20th August 2018. This means that insofar as the mandatory limits are concerned, they would equally apply to pending appeals. However, when it comes to applying exceptions, the same would be applicable from 20th August 2018 and not earlier. 5. Similar issue arose before the Co-ordinate Bench of this Court in Commissioner of Income Tax Vs. V.M. Salgaonkar and Brothers (P.) Ltd.1. On analysing Circulars i.e. 5 of 2024 and 9 of 2024 issued by CBDT, the Co-ordinate Bench held that the enhanced monetary limits would apply to pending Appeals but when it comes to exceptions specifically introduced, such exceptions cannot be construed retrospectively. The above decision has been followed by the Coordinate Bench of this Court in Pr. 1 (2024)169 taxmann.com 597 (Bombay) 11-ITXA-2354-2019.DOC Commissioner of Income Tax v. IPL Loan Trust2 and in Principal Commissioner of Income tax v. Axis AD Print Media (I) Ltd.3 6. Applying the principles (supra) to the letter dated 20th August 2018 and Circular dated 11th July 2018, involved in the present Appeals, we are satisfied that the Appeals were instituted before 20th August 2018 and would have to be disposed of as the tax effect involved in these Appeals is below mandatory prescribed limit. 7. For the above reasons, we dispose of the Appeal, leaving the question of law open to be appropriately decided as and when the occasion so arises. (ADVAIT M. SETHNA, J.) (SUMAN SHYAM, J.) 2 [2025] 171 taxmann.com 725 (Bombay). 3 [2025]172 taxmann.com 114 (Bombay). Page 4 of 4