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2019 (4) TMI 1173 - HC - Income TaxDisallowances of bogus purchases to 25% - concern person of seller makes statement in search that he issued bogus bills to various parties on nominal commission - in light of the statement AO held that the evidence for purchase produced by the assessee was not genuine and disallowed - AO worked out the yield ratio and found that during the period from assessment years 1992-93 to 1997-98, there was a big variation in actual yield achieved - assessee company had not provided the reason for decrease in gross profit ratio and details of yield as called for - assessee also submitted that if the purchases are held to be bogus, the corresponding sales be excluded - CIT(A) restricted the disallowance to 25% - Tribunal dismissed the appeals - HELD THAT:- As can be seen from the order passed by the Commissioner (Appeals), he, after appreciating the material on record, has recorded a finding of fact to the effect that the assessee had produced goods by utilising such bulk drugs and it is in the light of such finding of fact recorded by him that he has restricted the disallowance on account of bogus purchases to 25%. The Tribunal has not disturbed such finding of fact recorded by the Commissioner (Appeals). A perusal of the proposed questions shows that the appellant has neither challenged the concurrent finding of fact recorded by the Commissioner (Appeals) and the Tribunal, nor has it been pleaded that the findings of fact recorded by the Tribunal are perverse. In the facts of the present case, the Tribunal, having concurrently found that there were corresponding sales in respect of the bogus purchases, was wholly justified in confirming the order passed by the Commissioner (Appeals) in restricting the bogus purchases to 25% of the bogus purchases. Since the Tribunal as well as the Commissioner (Appeals), have merely followed the decision of the jurisdictional High Court, no infirmity can be found in the impugned order passed by the Tribunal warranting interference. However, it may be clarified that the quantum of deduction, namely, 25% cannot be said to be a fixed standard, inasmuch as, in the case of Sanjay Oilcake Industries v. Commissioner of Income tax [2008 (3) TMI 323 - GUJARAT HIGH COURT] what the court has held was that the extent of restriction was merely an estimate and that an estimate cannot give rise to a question of law. Nonetheless, having regard to the facts and circumstances of this case, this court does not find any warrant for interference. In the light of the above discussion, the conclusion arrived at by the Tribunal being based upon a finding of fact, namely, that there were corresponding sales in respect of the bogus purchases, the impugned order passed by the Tribunal cannot be said to give rise to any question of law, much less, a substantial question of law warranting interference - appeals dismissed.
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