9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 149 - AT - Income TaxEstimation of income - bogus purchases - CIT-A restricted the disallowance to 25% - HELD THAT - No infirmity in the order passed by the Ld.CIT(A) in restricting the addition/disallowance to the extent of 25% of the purchases for the assessment years 200-10 and 2010-11- See VIJAY PROTEINS LTD. VERSUS ASSISTANT COMMISSIONER 1996 (1) TMI 144 - ITAT AHMEDABAD-C . Grounds raised by the revenue are dismissed for both these assessment years.
Issues:
Appeal against the order of CIT(A) restricting addition of purchases to 25% instead of 100% as non-genuine by AO for A.Ys. 2009-10 & 2010-11. Analysis: The appeals were filed by the revenue challenging the common order of the CIT(A) restricting the addition of purchases to 25% instead of 100% as non-genuine by the Assessing Officer. The assessee, engaged in manufacturing, filed returns for the relevant assessment years. The Assessing Officer reopened assessments based on information about accommodation entries. The assessee provided various documents to prove the genuineness of purchases, but parties were not produced before the AO. The AO treated 100% of alleged bogus purchases as non-genuine. On appeal, the CIT(A) considered the evidence and submissions, restricting the disallowance to 25% of non-genuine purchases. The AO's decision was based on the failure to prove the genuineness of transactions and lack of party cooperation. The CIT(A) referred to judicial pronouncements and concluded that a 25% disallowance was justified based on the nature of the appellant's business and benefits derived from using accommodation entries. The CIT(A) observed that the AO rightly disallowed part of the purchases from hawala dealers, as evidenced by a search operation by the Sales Tax Department. The CIT(A) referred to the judgment of the Gujarat High Court and upheld a 25% disallowance on purchases from hawala dealers. The CIT(A) restricted the disallowance made by the AO to 25% of the purchases claimed. The appeals were heard, and the Department's grounds were dismissed for both assessment years. The order pronounced by the ITAT upheld the CIT(A)'s decision to restrict the addition/disallowance to 25% of purchases for the relevant assessment years.
|
