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TMI Blog2018 (3) TMI 1894X X X X Extracts X X X X X X X X Extracts X X X X ..... chases gives the assessee various benefits in the form of tax saving etc at the expense of Exchequer. In similar facts and circumstances following the decision of Simit P. Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] a disallowance of 12.5% has been held to be meeting the end's of justice in various decisions of the ITAT Mumbai in such cases. Accordingly, we hold that in the present case the disallowance should be restricted to 12.5% of the bogus purchase. - I.T.A. No. 4735/Mum/2015, I.T.A. No. 5211/Mum/2016, CO No. 157/Mum/2017 (Arising out of ITA No. 4735/Mum/2015) - - - Dated:- 22-3-2018 - SHRI SHAMIM YAHYA, AM AND SHRI PAWAN SINGH, JM For the Appellant : Ms. Pooja Swarop For the Respondent : Shri G. P. Mehta O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he records, we condone the delay in filing the aforesaid appeal by the assessee. 7. Brief facts of the case are as under: The assessee is a partnership firm and deals in the business of trading in iron and steel. In this case, the information was received that few of the parties, from whom the assessee had purchased the material/goods, were suspicious. This information was received from the Sales Tax Department. Sales Tax Department claimed that these parties had stated, on oath, before them that they have merely provided entries to the beneficiaries and no goods were actually delivered by them. The details of such bogus purchases, claimed to had been made, from the Hawala parties, are as under: S.NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer disallowed entire hawala purchases, amounting to ₹ 1,78,56,471/- and added back to the total income of the assessee. 9. Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) restricted the addition to 25% of the bogus purchase. 10. We have heard both the counsel and perused the records. We find that credible and cogent information was received in this case by the assessing officer that certain accommodation entry provider/bogus suppliers were being used by certain parties to obtained bogus bills, assessee was found to have taken accommodation entry/bogus purchase bills during the concerned assessment year from different parties. Furthermore it is noted that in such factual scenario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision in the case of Sumati Dayal 214 ITR 801 and Durga Prasad More 82 ITR 540. In the present case the assessee wants that the unassailable fact that the suppliers are non-existent and thus bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of above apex court decisions. In this factual background, the assessee s plea for opportunity to cross examine the person from whom he has obtained bogus bills is totally unsustainable. 12. In these circumstances learned departmental representative has referred to Hon ble Gujarat High Court decision in the case of Apex Appeal No. 240 of 2003 in the case of N K Industries vs Dy CIT, order dated 20.06.2016, wherein hu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not been doubted. As held by the Hon'ble jurisdictional High Court Nikunj Eximp Enterprises (in writ petition no 2860, order dt. 18.6.2014) that when sales are not doubted, hundred percent disallowance of purchasers as bogus is not permissible. However the facts of that case were a little different inasmuch as the sales-was to the government departments. Be as it may, we find that in this case, the facts of the case indicate that assessee has engaged into the grey market for making purchases. Making such purchases gives the assessee various benefits in the form of tax saving etc at the expense of Exchequer. In similar facts and circumstances following the decision of Hon blee Gujarat High Court in the case of CIT vs Simit P. Sheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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