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TMI Blog2021 (3) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ent allowance for the purchases said to be bogus when sales are not doubted. Facts of the present 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 the disallowance out of the bogus purchases done by the learned CIT(A) meets the end of justice. Accordingly we uphold the order of learned CIT(A). Penalty levied under 271(1)(c) - disallowance of 100% on account of bogus purchases solely on Sales Tax Department information - HELD THAT:- The purchase vouchers were duly produced and the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by : Shri T.S. Khalsa ORDER Per Shamim Yahya (AM) :- ITA No. 3732/Mum/2019 This is an appeal by the revenue wherein the revenue is aggrieved that learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] has reduced the addition for bogus purchase of ₹ 26,39,695/- done @ 100% by Assessing Officer by sustaining only part for the Assessment Year 2011-12 vide order dated 28.3.2019. 2. The assessee in this case is engaged into contractual work-in-progress. The assessment was reopened upon information from sales tax department that assessee has made purchases from bogus dealers, the Assessing Officer made 100% addition of the bogus purchase. The Assessing Officer did not even issue notice to the alleged bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from honourable jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (in writ petition no 2860, order dated 18.6.2014). In this case the honourable High Court has upheld hundred percent allowance for the purchases said to be bogus when sales are not doubted. 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 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 the disallowance out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is accepted by the appellant. The appellant has requested to restrict the penalty to the amount sustained in the quantum appeal. The penalty is leviable only the amount which has been sustained. Therefore the Assessing Officer is accordingly directed to restrict the levy of penalty to the extent of addition confirmed in the appeal. 9. Against this order revenue is in appeal before us. 10. We have heard learned Departmental Representative and perused the records. As clear from the facts recorded above the disallowance has been made on an estimated basis on account of the nonproduction of suppliers before the assessing officer. The purchase vouchers were duly produced and the payments were through banking channel. In these backgr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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