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TMI Blog2019 (3) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... ready shown by the assessee and offered to tax should be reduced 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. Accordingly, we modify the order of learned CIT-A and direct that the 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. - Decided partly in favour of assessee. - ITA No.2364/Mum/2018 - - - Dated:- 4-2-2019 - Shri Shamim Yahya, AM And Shri Ram Lal Negi, JM For the Appellant : Shri N. G. Rao For the Respondent : Shri C. S. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3,10,400/-) totally aggregating to ₹ 49,61,764/-, the assessment of the assessee was reopened by issue of notice u/s. 148. 3. To ascertain the genuineness of the said purchases, the AO asked the assessee to produce the parties alongwith their books of accounts and also furnish evidences to establish the genuineness of the said purchase transactions. The assessee was unable to produce the said parties. Further, the vital documents related to transportation of the material such as delivery challan, transport receipts, octroi receipts, weigh-bridge slip, etc. could not be submitted by the assessee. However, the assessee could tally the bogus purchases with the corresponding sales. Therefore, the AO concluded that the assessee had ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petition no 2860, order dt. 18.6.2014). In this case, the Hon ble 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 the 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 regard the learned counsel of the assessee has prayed that when only the profits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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