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April 2026

Sec. 68 r.w.s. 69C – Bogus exports – Additions based solely on DRI show-cause notice without independent inquiry – No corroborative evidence brought on record – Deletion by CIT(A) justified – Subsequent Customs adjudication having material bearing admitted as additional evidence – Matter remanded for de novo adjudication

By Jagdish T Punjabi, Chartered Accountant Devendra Jain & Aditya Bhatt, Advocates
Reading Time 3 mins

4. [2025] 128 ITR(T) 572 (Chandigarh - Trib.)

ITO vs. A.K. Exports

A.Y.: 2002-03, 2005-06, 2006-07 AND 2007-08 DATE: 01.07.2025

Sec. 68 r.w.s. 69C – Bogus exports – Additions based solely on DRI show-cause notice without independent inquiry – No corroborative evidence brought on record – Deletion by CIT(A) justified – Subsequent Customs adjudication having material bearing admitted as additional evidence – Matter remanded for de novo adjudication

FACTS

A search action was conducted in the case of the assessee group by the Directorate of Revenue Intelligence (DRI), pursuant to which show-cause notices were issued alleging that the assessee and its group concerns were not engaged in genuine manufacturing activities and had undertaken bogus export transactions to fraudulently claim export incentives such as DEPB and duty drawback.

Relying solely on such show-cause notices, the Assessing Officer concluded that the assessee had obtained bogus purchase bills, exported inferior quality goods at inflated prices to non-existent foreign entities, and routed unaccounted money back into India in the guise of export proceeds. Accordingly, for

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