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TMI Blog2018 (3) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case the 12.5% disallowance out of the bogus purchases meets the ends of justice. This is following the decision of the Hon’ble Gujarat High Court in the case of Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) - I.T.A. Nos. 4655 And 4656/Mum/2017 - - - Dated:- 3-1-2018 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For The Appellant : Shri R. C. Jain For The Respondent : Ms. N. Hemalatha ORDER Per Shamim Yahya, A. M.: These are appeals by the assessee against the common order of the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 and 2010- 11. 2. The first common issue relates to the validity of reopening and the second common issue relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils such as copy of the affidavits filed by these hawala parties, their statement recorded by the Sales Tax Department, etc, were obtained by the Assessing Officer. The examination of these details clearly revealed that the said parties were indulging in issue of bogus bills, without physical delivery of goods. The Assessing Officer therefore, concluded that the assessee had suppressed its taxable income by debiting the purchases from these hawala parties. Accordingly, the Assessing Officer had reasonable belief that the incomes for AYs. 2009-10 and 2010-11 had escaped the assessment, within the meaning of the provisions of Section 147 of the I T Act, therefore, after recording necessary reasons/satisfaction, issued the notices u/s 148 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Counsel and perused the records. I find that in this case the sales have not been doubted it is settled law that when sales are not doubted, 100% disallowance for bogus purchase cannot be done. This proposition is supported from Hon ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises. However, the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee saving on account of non-payment of tax and others at the expense of the exchequer. In such situation, in my considered opinion, on the facts and circumstances of the case the 12.5% disallowance out of the bogus purchases meets the ends of justice. This is following the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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