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2017 (12) TMI 797 - AT - Income TaxDisallowance of bogus purchase - Held that:- The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. The assessing officer also issued notices to these parties at the addresses provided by the assessee. All these notices have returned unserved. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. We find it further strange that assessee wants the Revenue to produce assessee’s own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence, the Revenue authorities cannot put upon blinkers and accept these purchases as genuine. This proposition is duly supported by Hon’ble Apex Court decision in the case of Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME Court] and CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court]. In the present case, the assessee wants that the unassailable fact that the suppliers are non-existent and, thus, bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of Hon’ble Apex Court decisions. - Decided against assessee. For A.Y. 2011-12 we direct that 6.5% disallowance for bogus purchase by the ld. Commissioner of Income Tax (Appeals) serves the interest of justice. The Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (2013 (1) TMI 88 - BOMBAY HIGH COURT ) has also expounded that when sales are not doubted, 100% disallowance of purchase is not feasible. Although fact of the case were a little different as referred above. As regards the ground raised by the assessee that only 2% disallowance should be done following the Tribunal’s decision we are of the considered opinion that in our order we have followed Hon’ble High Court decision. In the hierarchy of judicial precedence, the decision of the higher court prevail over the tribunal decision. Hence, we dismiss these grounds raised by the assessee.
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