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TMI Blog2025 (1) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... mon order. 3. For the sake of convenience, facts are recorded from Tax Appeal No.1196 of 2024. 4. This Tax Appeal is filed under Section 260A of the Income Tax Act, 1961 (for short 'the Act') arising out of the Judgment and Order dated 19.09.2022 passed by the Income Tax Appellate Tribunal, Surat (for short 'the Tribunal') in ITA No. 455/SRT/2019 for the Assessment Year 2014-2015 raising the following substantial questions of law:- "1. Whether on the facts and circumstances of the case and in law, 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. 7,10,69,545/- ignoring the facts that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT (Appeals) Surat, who vide order dated 23.07.2019, partly allowed the appeal of the assessee, relying on the decision of Income Tax Appellate Tribunal in the case of Gangani Impex (ITA No. 353/Ahd/2017) dated 15.11.2018. The CIT (Appeals) confirmed 5% of the impugned purchase to the amount of Rs. 35,53,477/-. 11. Aggrieved by the order of the CIT(Appeals), the revenue preferred an appeal before the Tribunal. The Tribunal vide order dated 19.09.2022, partly allowed the appeal of the revenue relying upon the decision of Co-ordinate Bench of Tribunal in case of Pankaj K. Chaudhary in ITA No. 1152/AHD/2017 and restricted the disallowance to 6% of the disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the validity of reassessment. 19. In the result, appeals filed by assessees (ITA Nos. 889 to 893/AHD/2017 and ITA Nos. 761 to 762/SRT/2018) are dismissed, whereas the appeal filed by the Revenue (ITA No.916 to 920/AHD/2017 and ITA Nos. 753 to 754/SRT/2018) are partly allowed." 16. This Court in case of Pankaj K. Choudhary (Supra) while dismissing the Tax Appeal No.617 of 2022 has held as under: "5. The Assessing Officer noticed the contentions of the assessee that confirmation, purchase bills, bank statement, stock register, copy of ITR were already filed. The Assessing Officer was, however, of the view that transactions were bogus and merely that it routed through the banking channel, was not sufficient to conclude that they wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of this I am of the considered opinion that disallowance of 12.5% of the impugned purchases would be reasonable and would meet the ends of justice. Hence, the disallowance is restricted to 12.5% of the impugned purchases for the assessment year in appeal." 5.2 The disallowance at 100% was made in the assessment order for the year under consideration to the tune of Rs. 4,34,00,343/-, which was reduced to 12.5% at Rs. 54,25,040/-. Thereafter, the issue was dealt with by the appellate Tribunal. The appellate Tribunal endorsed to the view taken by the appellate Commissioner. It was observed that Assessing Officer failed to consider the evidence furnished by the assessee. 5.3 Considering the facts and relevant aspect, the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed." 6. The view taken and the conclusion arrived at by the appellant Tribunal are based on material before it and after analysing the facts and figure available before it. When the Tribunal has thought it fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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