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TMI Blog2023 (9) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal (for short 'the Tribunal') in the respective appeals. 2. Since the substantial questions of law in all these appeals are the same, except the variance in the amounts in the concerned questions of law, the substantial question of law as framed in Tax Appeal No. 489 of 2023 is taken up for consideration. (i) Whether on the facts and in the circumstances of the case and in law, the Ld. Tribunal was justified in estimating the addition in respect of bogus purchases @ 6% of such purchases as against disallowance made by the Assessing Officer @100% of such purchases amounting to Rs. 4,44,44,172/- ignoring that these purchases are sham transactions fabricated through bogus paper concerns of Gautam Jain Group entities which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.12.2022 partly allowed the appeals of the Revenue and restricted the disallowance at the rate of 6% of the impugned purchase. 3. Perusal of the order of the Tribunal would indicate that having noticed that the grievance of the assessees in these appeals is that they had submitted bills and vouchers, stock registers and the transactions were through banking channels and therefore addition at the rate of 5% sustained by the CIT(A) should be deleted whereas the main grievance of the revenue was that since all the purchases were bogus and in the nature of accommodation entry, the addition made by the assessing officer should be sustained. The Tribunal noted that the issue under consideration was squarely covered by the judgement of the coord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der). Before us, the Ld. CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon'ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon'ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs 1.86 Crore. The disputed transaction in the said case was Rs. 1.68 Crore. However, in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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