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2018 (6) TMI 1595 - HC - Income TaxBogus purchases - Tribunal restricting the addition to 25% of the value of alleged purchases after categorically finding it to be bogus - HELD THAT - Revenue cannot be said to be aggrieved by the said decision of the Tribunal. However, the same shall be without prejudice to the rights and contentions of the Revenue in other appeals in which it is the case on behalf of the Revenue that in fact, there shall be disallowance of 100% of the total bogus purchases. Appeal admitted to consider the following question of law - Whether the Appellate Tribunal has erred in law and on facts of the case in restricting the addition to 25% of the value of alleged purchases after categorically finding it to be bogus?
Issues involved:
1. Disallowance of 25% of alleged bogus purchases by ITAT for various Assessment Years. 2. Discrepancy in disallowance percentage between Revenue and assessees. 3. Appeals filed by Revenue against ITAT's decisions. 4. Disagreement on the percentage of disallowance between Revenue and assessees. 5. Admissibility of appeals based on the grounds of aggrievement. Analysis: 1. Disallowed 25% of Bogus Purchases: The High Court addressed multiple Tax Appeals where the Income Tax Appellate Tribunal (ITAT) had confirmed the orders passed by the Commissioner of Income Tax (Appeals) restricting the disallowance to 25% of the alleged bogus purchases for various Assessment Years. The Revenue challenged these decisions through separate appeals questioning the limitation of disallowance to 25%. 2. Discrepancy in Disallowance Percentage: The assessees contended that the disallowance should have been limited to 5% of the total bogus purchases instead of 25%. However, the Revenue argued that 100% of the bogus purchases should have been disallowed, leading to a discrepancy in the percentage of disallowance between the Revenue and the assessees. 3. Appeals by Revenue: The Revenue filed multiple Tax Appeals against the ITAT's decisions, seeking to challenge the limitation of disallowance to 25% of the alleged bogus purchases. The High Court noted that the Revenue had filed appeals arising from the Tribunal's dismissal of the assessees' appeals, emphasizing the differing perspectives on the appropriate disallowance percentage. 4. Admissibility of Appeals: The High Court dismissed certain appeals filed by the Revenue, including Tax Appeals No.606/2018, 611/2018, and 618/2018, on the grounds that the Revenue could not be considered aggrieved by the Tribunal's decision to dismiss the assessees' appeals. However, the dismissal was without prejudice to the Revenue's rights in other appeals where a 100% disallowance was sought. 5. Remaining Appeals and Question of Law: For the remaining appeals, Mrs. Mauna Bhatt, representing the Revenue, argued that both the CIT(A) and the ITAT should have allowed a 100% disallowance of the total bogus purchases. The High Court admitted these appeals to consider the common question of law regarding the ITAT's decision to restrict the addition to 25% of the alleged purchases despite categorically finding them to be bogus. In conclusion, the High Court's judgment delved into the intricacies of the disallowance percentages applied to alleged bogus purchases, highlighting the contrasting viewpoints of the Revenue and the assessees while addressing the admissibility of appeals based on aggrievement and the core legal question of the appropriate disallowance percentage.
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