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TMI Blog2021 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Pr. Commissioner of Income Tax u/s.263 of the Act is therefore uncalled for. Accordingly, we hold that the order passed by the Ld. Pr. Commissioner of Income Tax u/s.263 of the Act is not valid in law under the given circumstances. Hence, we allow the appeal of the assessee. - ITA No. 974/PUN/2018 - - - Dated:- 8-10-2021 - Shri R.S. Syal, VP And Shri Partha Sarathi Chaudhury, JM For the Assessee : None For the Revenue : Shri J.P Chandrakar ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax-2, Kolhapur dated 28.03.2018 passed u/s.263(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanak Guru Tubes Metals Pvt. Ltd. 1,42,647 Total purchases made by the assessee 1,42,647 4.1 During the assessment proceedings, the Assessing Officer had made disallowance to the extent of ₹ 28,530/- being 20% of such bogus purchases of ₹ 1,42,647/-. 5. That during the revisionary Proceedings u/s.263 of the Act, the Ld. Pr. Commissioner of Income Tax had relied on the decision of the Hon ble Gujarat High Court in the case of N.K. Proteins Ltd. Vs. DCIT (2016) 72 Taxman.com 289 (Gujarat) wherein it has been held that when the entire purchases were found to be bogus then confirming disallowance of only 25% of bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases which is also against the decision of the Hon ble Gujarat High Court (supra.), therefore, order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of the Revenue. 7. We have perused the case records and heard the submissions of the Ld. DR. We have also considered the findings of the Ld. Pr. Commissioner of Income Tax. We find that the Assessing Officer has disallowed 20% of the bogus purchases and the facts herein suggest that the assessee has consumed such bogus purchases. It is also observed that the assessee allegedly purchased goods through the Hawala dealers and thereafter, consumed for construction of showroom of Sai Service Station situated at Kolhapur. In such a situation, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. We do not find any error in the view of the Tribunal. No question of law arises. In view of the decision of the Hon ble Jurisdictional High Court, we are of the considered view that it would be reasonable to sustain addition @ 10% of the amount of bogus purchases, being profit element involved therein. 8. That also in the recent decision of the Pune Bench of the Tribunal in the case of Ashoka Buildcon Limited Vs. ACIT, ITA No.1088/PUN/2017 ITA No.1135/PUN/2017 dated 04.10.2021 has placed reliance on the decision of the Hon ble Bombay High Court in the case of Pr.CIT Vs. Paramshakti Distributors Pvt. Ltd. (supra.) and sustained 10% of addition on the amount of bogus purchases in the facts and situation wherein such bogus p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , what the Tribunal by the impugned Judgment held is that the Department had not rejected the instance of the purchases since the sales out of purchase of such raw material was accounted for and accepted. With above position, the Tribunal applied the principle of taxing the profit embedded in such purchases covered by the bogus bills, instead of disallowing the entire expenditure. We do not find any error in the view of the Tribunal. No question of law arises. In view of the decision of the Hon ble Jurisdictional High Court, we are of the considered view that it would be reasonable to sustain addition @ 10% of the amount of bogus purchases, being profit element involved therein. Thus, grounds of appeal raised by the assessee are par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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