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TMI Blog2024 (11) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 260A of the Income Tax Act, 1961 (for short 'the Act') raising following substantial questions of law arising out of the Judgment and Order dated 28.06.2022 passed by the Income Tax Appellate Tribunal, Surat (for short 'the Tribunal') in ITA No.920/AHD/2017 for the Assessment Year 2013-2014 : - "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. 8,64,04,012/- 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 Bhanwerlal Jain. 2. Whether On the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, the Hon ble tribunal is right in deleting the addition made by the AO on account of bogus purchase even though in the case of Mayank Diamonds Pvt Ltd. [2014(11) TMI 812], the Hon'ble High Court has directed to make addition at the rate of 5% of the total turnover." 3. Brief facts of the case are that: 3.1 The respondent-assessee is engaged the business of import, processing, export and trading of diamonds. The return of income for Assessment Year 2013-14 was filed on 30.09.2013 declaring total income at Rs. 2,53,33,000/-. 3.2 On the basis of the information received from the Investigation Wing, Mumbai in case of Shri Bhanwarlal Jain Group, it was found that the said group was engaged in the business of issuing non-genuine a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purchases is fair and reasonable. 4.2. Learned advocate Mr.Rudram Trivedi submitted that this Court has dismissed the Tax Appeal No.617 of 2022 in case of Pankaj K. Choudhary (Supra) wherein, similar questions of law raised by the Revenue. 5. Considering the above submissions, the relevant extract from the order of the Tribunal is reproduced herein below : "18. As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h circumstances the disallowance of 100% of purchases cannot be justified. Also as held above, the appellant would nave indulged in above practice in order to get some benefit. And it is this benefit derived by the appellant that need to be taxed. What would be the magnitude of benefit derived by the appellant is the mute question. In the appellant's case, it is seen that GP rate shown is 0.78%". 5.1 The final view was expressed in para 10.10, "Following the above judicial pronouncements and views taken by Ld. CIT(A) & AOS in a few identical cases. In a couple of identical cases, where the GP shown by the appellants is more than 5%, I have confirmed the disallowance of the impugned purchases to the extent of 5% of the impugned purchases. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naged by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. In M/s. Surya Impex (supra) the court held in favour of the assessee. The questions of law involved in the said case were of the same nature and were in the context of similar facts involving the same group. 7. For all the above reasons, substantial questions of law proposed by the appellant in this appeal stands already answered. No question of law much less any substantial questions of law arise in the facts of the present case. No other substantial question of law arises. The appeal is meritless. It is summarily dismissed." 7. In view of the above, the substantial questions of law proposed by the appellant in this appeal stands already answered and therefore, no question of law much less any substantial questions of law c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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