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TMI Blog2008 (5) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... s common order. 2. The only ground raised by the assessee is against the addition of ₹ 12,77,686/- sustained by the learned Commissioner of Income Tax (Appeals) on account of bogus purchase made by the assessee while in ITA No.2801 and 2937/Ahd/2008 the Revenue's appeal, the only ground raised is against the relief of ₹ 29,81,266/- allowed by the learned CIT(A). 3. The facts of the case are that the assessee derives income from trading in iron, angles, plates etc. During the course of investigation, it was found by the Assessing Officer that the purchases claimed to have been made by the assessee from M/s.Girnar Sales Corporation and Shiv Metal Corporation were bogus. The total purchases made from the two parties during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the facts of the assessee's case are similar to Vijay Proteins and several other decisions of the ITAT wherein some percentage of the bogus purchases is disallowed. He also referred to the decision of the ITAT in the case of ITO Vs. Sun Steel, 92 TTJ (Ahd) 1126 wherein the only disallowance of ₹ 50,000/- out of bogus purchase was made. He also referred to the decision of ACIT Vs. Kulubi Steel, ITA No.1568/Ahd/2008 wherein 12.5% bogus purchase was disallowed. Accordingly, he submitted that a reasonable disallowance out of total purchase during the year under consideration should be made. 6. With regard to the addition for unexplained payment, it is submitted by the learned counsel that entire payment is recorded in the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Since the assessee has made the payment by cheque, which is duly debited in the assessee's bank account, the same cannot be said to be unexplained payment. Therefore, in our opinion, there was no justification for making the addition of ₹ 26,76,559/- as unexplained payment. 9. So far as the bogus purchase is concerned, we find that the Assessing Officer recorded the detailed finding so as to establish that the purchases claimed to have been made from Girnar Sales Corporation and Shiv Metal Corporation was bogus. The learned counsel for the assessee was unable to controvert the factual finding recorded by the AO in this regard. However, there is no dispute that the assessee is only a trader in the iron and steel and it has mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining bogus bills of some other parties, would do so for getting some benefit. But what would be the magnitude of the benefit would depend upon facts of each case. In the case of Vijay Proteins, ITAT held that such benefit to be 25% and therefore sustained the disallowance for bogus purchase at 25%. In the case of Sunsteel (supra), the ITAT deemed it fit to sustain the disallowance for a lumpsum amount of ₹ 50,000/-. However, we find that in the case of Shri Anubhai Shivlal (supra) the ITAT has considered both the decisions in the case of Vijay Proteins and Sunsteel (supra) and thereafter sustained the disallowance at 12.5%. Relevant findings of the ITAT in the case of Anubhai Shivalal reads are under: 3. At the time of hearing befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has sustained the addition of 25% of the bogus purchases. However, considering the facts of the assessee's case the CIT(A) restricted the disallowance to 12.5% as against 25% made in the case of M/s.Vijay Proteins Ltd. From these facts it is evident that the CIT(A) has sustained the addition at 12.5% of the non-genuine purchases considering the facts of the assessee's case. We, therefore, do not find any justification to interfere with the order of the CIT(A) in this regard. The same is sustained." After considering the facts and the arguments of both the sides, we are of the opinion that it would meet ends of justice, if the disallowance is sustained at 12.5% of the purchase from these two parties. The Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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