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TMI Blog2019 (1) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... ced from the standard 12.5% being directed to be disallowed on account of bogus purchase. We find considerable cogency in the submission of the learned counsel of the assessee, as otherwise it will be double jeopardy to the assessee. Disallowance in this case be restricted to 12.5 % of the bogus purchases as reduced by the gross profit rate already declared by the assessee on these transactions.Assessee fairly accepted this proposition. Appeal filed by the assessee stands partly allowed. - ITA No.5333/Mum/2017 - - - Dated:- 16-1-2019 - SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM For The Appellant : Ms. Aakriti Seth and Shri Mukesh B. Tandon For The Respondent : Shri Chaudhary Arun Kumar Singh ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a result of the evidences gathered during the course of investigation, search and surveys by the Sales-tax Authorities in Maharashtra regarding bogus purchase bills being issued to several parties. The information in this regard is also available in public domain on the website of the Salestax Department, Government of Maharashtra, www.mahavat.gov.in . 4. During the course of re-assessment proceedings, the assessee was asked to inter alia, submit details of ledger accounts of the above mentioned parties with copies of bills/invoices, complete bank statement and other documentary evidences to substantiate the genuineness of transactions. In order to verify the genuineness of the impugned transactions, notice u/s. 133(6) of the case was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses made from the aforesaid mentioned parties aggregating to ₹ 63,04,916/- was disallowed and added back to the total income of the assessee. 7. Upon the assessee s appeal, the ld. CIT(A) restricted the disallowance to 8% as under by concluding as under: 37 As narrated earlier, the Ld. A.O. in this case has held that the parties from which the purchases were made by the appellant were found to be bogus and that is the reason for which it was not produced during the assessment proceedings. The AR of the appellant contended that in the instant case, the issue is not evasion of VAT. In fact in this case, the VAT was paid twice. To substantiate this argument, the AR of the appellant produced the copies of the VAT paid challan al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (in writ petition no 2860 ,order dt 18.6.2014). In this case the honourable High Court has upheld 100% allowance for the purchases said to be bogus when sales are not doubted. However in that case all the supplies were to government agency. In the present case, the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation, in our considered opinion, on the facts and circumstances of the case, 12.5 % disallowance out of the bogus purchases meets the end of justice. However in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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