9911796707
TMI Blog2024 (10) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... /computed by the Assessee in respect of the genuine purchases as well as the alleged bogus purchases; and thereafter, restrict the quantum of addition sustained by the CIT(A) to the differential amount determined by taking into consideration the difference, if any, in the aforesaid gross profit margins. Assessee is also directed to co-operate and provide to the Assessing Officer the computation of gross profit margins to implement the aforesaid directions of the Tribunal - Assessee ground allowed for statistical purposes. - Shri Amarjit Singh, Accountant Member And Shri Rahul Chaudhary, Judicial Member For the Assessee : Shri Mehul Shah For the Department : Shri Raj Singh Meel ORDER PER RAHUL CHAUDHARY, JUDICIAL MEMBER: 1. These are cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent inquiry by treating the purchases as bogus in nature on mere suspicion that the parties were identified by the Investigation wing of the department as Suspicious dealers, and without appreciating the fact that the material sourced was in fact resold and identified by your Appellant as having been sold against relevant purchases. 3. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) while estimating 12.5% as gross profit on the alleged bogus purchases erred in not appreciating the fact that what could at the best be added was difference in applicable gross profit made on the purchases made; and Gross Profit Ratio offered by the Appellant was 50.77% as compared to 37.12% in immediatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in restricting the addition 64 12.5% of the bogus purchases as against entire bogus purchases added by the AO without appreciating the fact that description of fabric shown to have been purchased from Rathi Style and Textiles Private Limited and SVG Style and Textile Company Private Limited is different from the corresponding sale bills. 5. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition @12.5% of the bogus purchases as against entire bogus purchases added by the AD without appreciating the fact that as per assessee the transportation charges have been borne by Rathi Style and Textiles Private Limited and SVG Style and textile Company Private Limited, whereas o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estricted the disallowance of bogus purchases to 12.5% of the purchase amount. 8. We have heard both the sides and perused the material on record. 9. The case of the Revenue is that entire bogus purchases should be disallowed since the Assessee has failed to provide genuineness of purchases by filling documents showing movement of material. On the other hands it has been contended by the Assessee that it is undisputed position that the Assessing Officer has not disturbed the amount of sales and has accepted the sales disclosed by the Assessee are correct. It has been contended on behalf of the Assessee that there could be no sales without purchases. The Assessee has provided supporting invoices, ledger account, details of stock movement/rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court, it was contended by the Revenue that entire purchases should be added. The Hon ble Bombay High Court rejected the contention of Revenue and declined to frame question of law. While dismissing the appeal preferred by the Revenue on this issue, the Hon ble Bombay High Court held as under: 8. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .66% of Rs. 3,70,78,125/- which comes to Rs. 20,98,621.88 we think it fit to direct the revenue to add Rs. 20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue. 9. In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order as to costs. 11. On perusal of the above it is clear that the Hon ble Bombay High Court declined to frame question of law holding that in case of bogus purchases where sales are accepted by the Revenue, entire amount of purchases cannot be added. Further, the Hon ble Bombay High Court observed that the Tribunal had correctly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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