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2019 (8) TMI 924 - AT - Income TaxUnexplained cash credit addition u/s 68 - HELD THAT:- Assessee has failed to prove the identity, genuineness of transactions and creditworthiness of the parties with conclusive evidences. The Lower authorities further observed that although the assessee filed certain documents in order to prove the identity of the party but, mere furnishing certain documents including PAN number would not sufficient enough to discharge the onus cast upon the assessee u/s 68. The conduct of the parties in so far as allotment of preferential shares by accepting part amount and subsequent forfeiture of amount received from parties for non-payment of balance consideration for allotment of shares gives rise to suspicion. Assessee to discharge the onus cast upon it by filing necessary evidences. Since, the assessee has not offered any explanation for forfeiture of shares and also failed to prove identity, genuineness of transactions and creditworthiness of the parties, came to the conclusion that transaction between the parties are sham, which are not supported by necessary details. Facts remains unchanged, the assessee neither appeared nor filed any details before us to controvert findings of the facts recorded by the lower authorities. There is nothing to offer from the assessee side in order to prove the transactions of allotment of shares to two subscribers with any evidences and hence, we are inclined to uphold the findings of the CIT(A) and reject ground taken by the assessee. Additions made towards profit element embedded in alleged bogus purchases - AO has brought out clear facts in the light of information received from Sales Tax Department, Government of Maharashtra, coupled with further enquiries conducted during the course of assessment proceedings that purchases from above two parties are bogus in nature which are not supported by necessary evidence. Although, the assessee has filed primary evidences in from of purchase bills and payment proof to such purchases against banking channel, but failed to file further evidences in the back drop of clear findings from the Sales Tax Department that they are involved in providing accommodation entries without actual business activity. The assessee neither appeared nor filed any details to controvert the findings of fact recorded by the AO as well as the CIT(A). AO has taken support from the ratio in the case of CIT vs Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] where held that in case of alleged bogus purchases, only profit element embedded in those purchases needs to be taxed, but not entire alleged bogus purchases. The profit element required to be taxed needs to be ascertained depending upon facts of each case and accordingly considering the facts of case before the Court directed the Assessing Officer to estimate at 12.5% profit on alleged bogus purchases. Tribunal in number of cases has taken consistent view and directed the Assessing Officers to estimate 12.5% profit on alleged bogus purchases. In this case, the AO has estimated profit @12.5% on alleged bogus purchases. Therefore, we are of the considered view that the there is no reason to interfere with the findings of the Assessing Officer, hence, we are inclined to uphold the order of the Ld. CIT(A) and reject ground taken by the assessee. - Decided against assessee.
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