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TMI Blog2023 (8) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that respondent has purchased material from someone else while bogus bills were organized by these Hawala Traders. Therefore, at least to the extent even if it has been purchased from Hawala Traders the indisputable fact is that the purchases have been made and admittedly quantitative reconciliation of the stock was done by respondent of sale and purchase. ITAT therefore accepted the explanation of respondent that only the profit element in these accommodation entries are to be added to the income. CIT(A) has restricted the addition by estimating the gross profit at 12.5%. Whether that is the right estimate is a question of fact. Therefore, we see no reason to interfere. - K.R. Shriram And Firdosh P. Pooniwalla, JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Year 2009-10 declaring a total income of Rs. 6,64,570/-. Regular assessment was completed under Section 143(3) of the Income Tax Act, 1961 (the Act) on 12th December 2011 accepting the returned income. On 28th March 2013 the assessment was re-opened under Section 148 of the Act and addition on account of alleged accommodation entries taken by respondent from Hawala dealers were added to his income. The Assessing Officer (A.O.) had received information from Sales Tax Authority, Government of Maharashtra. The A.O. came to a conclusion after considering the depositions and affidavits filed before the Sales Tax Authority that the entities from whom respondent is alleged to have purchased were only indulging in bogus accommodation entries with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these bogus purchases as only profit has to be added in the income of the assessee. The only issue that requires to be considered is with respect to the extent of ad-hoc dis-allowance with respect to bogus purchases. Whether purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus is essentially a question of fact. Mr. Sharma relied upon a Judgment of the Hon ble Gujarat High Court in the case of N.K. Industries Limited vs. Deputy Commissioner of Income Tax ( Tax Appeal No. 240 of 2003) and connected appeals decided on 20th June 2016. 6. In the present case, one thing is clear is that the A.O. has not doubted the sales made by respondent against the purchases. Similar case of respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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