9911796707
TMI Blog2024 (9) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... Year 2008-09 and ITA No. 761/SRT/ 2018 for the Assessment Year 2010-11 at the instance of the appellant - Revenue by raising the following substantial questions of law: 1. Whether on the facts and circumstances of the case and in law, the Hon ble ITAT has justified in restricting the addition made by the AO from Rs. 14,39,42,707/- being 100% to 6% of the bogus purchase without appreciating the facts that the assessee had failed to prove the genuineness of the transaction made with the concerns which was identified as bogus entities completely run by Shri Bhanwarlal Jain. 2. Whether on the facts and circumstances of the case and in law, the Hon ble ITAT has justified in restricting the addition from 100% to 6% made by the AO ignoring the fact that Shri Bhanwarlal Jain is engaged in the business of accommodation entries and hence AO was correct in concluding that the assessee was a beneficiary of the accommodation entry in guise of purchase. 3. Whether the facts and circumstances of the case in law, the Hon'ble Tribunal is right in giving decision by restricting the addition to 6% without considering the judgment of Gujarat High Court in the case of N.K. Industries Ltd. vs. DCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5M 1,00,91,658/- Total 15,39,42,707/- [2.3] On the basis of information available on about the accommodation entries provided by Bhanwarlal Jain Group, the Assessing Officer finally concluded after rejecting the book result of the assessee firm attracting the provisions of Section 145 (3) of the Act and made addition of 100% of the alleged bogus purchases. [2.4] Being aggrieved by the aforesaid, the assessee preferred appeal before the CIT(A), Surat, who, vide order dated 31st January 2017, partly allowed the appeal of the assessee and restricted additions /disallowances of purchases to 5% of the impugned / bogus purchases relying upon the decision of this Court in the case of M/s. Mayank Diamond Pvt Ltd reported in 2014(11) TMI 812(Guj). [2.5] Being aggrieved by the aforesaid, the Revenue as well as the assessee preferred appeal before the Tribunal, vide its order dated 28th June 2022, sustained the addition at 5% of bogus purchase / accommodation entries on account of bogus purchase relying on the judgement of the Coordinate Bench of this Court in the case of Principal Commissioner of Income Tax 1 vs. Pankaj K. Choudhary [R/Tax Appeal No.617 of 2022 decided on 7th March 2022]. [3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report the AO has reason to believe that the income of the assessee has escaped assessment and thus the action of AO in reopening is justified. 18. We find that the Hon ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of similar notice of reopening, which was also issued on the basis of information of investigation wing that they have searched a person who is engaged in providing accommodation entries, held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon ble High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO made disallowance of entire bogus purchase and on first appeal before CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld. CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee s are more than 5%. However, in the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld. CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs.66,09,62,458/-. The assessee has shown Gross Profit @ 0.78% and net Profit @ 0.02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs.1,81,840/- only. We are conscious ..... X X X X Extracts X X X X X X X X Extracts X X X X
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