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TMI Blog2018 (11) TMI 1905X X X X Extracts X X X X X X X X Extracts X X X X ..... ent embedded in those purchases could be added as income of the assessee, but not total purchases from the said parties. The co-ordinate bench of ITAT, Mumbai in a number of decisions, by following the judgement of Hon ble Gujarat High Court in the case of Simit P Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] has directed the AO to sustain addition to the extent of 12.5% of bogus purchases. In this case, facts are identical to the facts which have already been considered by the co-ordinate bench in a number of cases. Therefore, consistent with the view taken by the co-ordinate bench, we direct the AO to sustain addition to the extent of 12.5% of alleged bogus purchases. - Decided partly in favour of assessee. - ITA No 5113/Mum/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring total income of Rs.35,49,681 and the return was processed u/s 143(1) of the I.T. Act, 1961. Thereafter, the case has been reopened u/s 147 on the ground that income chargeable to tax had been escaped assessment on account of accommodation entries in the form of bogus purchases obtained from hawala operators / suspicious dealers, as per the list of Sales-tax department. In response to notice, the assessee, vide letter dated 22-09-2009 stated that return filed u/s 139 shall be treated as return filed in response to notice u/s 148 of the Act. Thereafter, the assessment has been taken up for scrutiny and after considering submissions of the assessee, the AO has made addition of Rs.15,89,604 being purchases purported to have been made from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, there is no reason to interfere with the findings of the AO. Aggrieved by the order of Ld.CIT(A), assessee is in appeal before us. 4. The Ld.AR for the assessee, at the time of hearing, submitted that although the assessee has taken a ground challenging reopening of assessment, the assessee does not want to press that ground and accordingly, ground 1 raised by the assessee is dismissed, as not pressed. 5. Insofar as the issues involved on merits, the Ld.AR submitted tht the assessee has filed complete details for purchases including purchase bills, payment proof and also complete details of quantitative stock details to prove the purchases. The AO disregarding evidences, made addition only on the basis of information receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der these circumstances, various Courts and Tribunals have taken a consistent view that when the purchases are considered as bogus, only profit element embedded in those purchases could be added as income of the assessee, but not total purchases from the said parties. The co-ordinate bench of ITAT, Mumbai in a number of decisions, by following the judgement of Hon ble Gujarat High Court in the case of Simit P Sheth vs CIT 38 taxmann.com 385 (Guj) has directed the AO to sustain addition to the extent of 12.5% of bogus purchases. In this case, facts are identical to the facts which have already been considered by the co-ordinate bench in a number of cases. Therefore, consistent with the view taken by the co-ordinate bench, we direct the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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