TMI Blog2011 (9) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... SERVED JUDGMENT : Revenue has proposed following questions of law for determination of this Court in the present Tax Appeal which arises out of Order dated 19th December 2008 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as the Tribunal ). Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in confirming the addition to 25% of bogus purchases purported to have been made from nonexistent parties ? Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in modifying order of the CIT(A) and issuing direction to the A.O to consider disallowance of 25% on such bogus purchases in spite of holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on behalf of revenue with whose assistance the papers of the adjudicating authorities have been examined closely for final disposal. 6. As can be noted from the record the assessee herein is engaged in the purchase and sale of iron and steel items. During the year under consideration the Assessing Officer noted the sale of ₹ 1,40,19419/with gross profit @ 9.02% as against purchases of ₹ 2,96,00,000/with gross profit @ 5.54%. It added the sum of ₹ 17,46,130/on account of bogus purchases made from M/s Girnar Sales Corporation, Shiv Metal Corporation and Hindustan Metal Corporation. 7. The Assessing Officer made enquiries with regard to the these parties and what have been noted was when discreet inquiries were carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A). Learned Authorised Representative of the assessee submitted that the disallowance was execessive and in absence of purchase it was not possible to secure the turnover which the assessee has achieved. Both the parties before us agreed that 25% of the bogus purchases will be fair and reasonable amount for disallowance as inflation in purchases. We, therefore, modify the orders of the lower authorities and restrict the disallowance to 25% of the bogus purchases. Thus this ground of appeal of the assessee is partly allowed. As aptly submitted by learned counsel Mr Parikh the reliance placed by the Tribunal in case of Vijay Proteins Pvt Ltd Vs CIT(A) is wholly misconceived in as much as in case of Vijay Proteins (supra) as righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the parties. 12. It is convincing sufficiently from the materials on record that in absence of any kind of purchase or sale it would not be befitting and desirable to employ the ratio of M/s Vijay Proteins Pvt Ltd (supra) as has been done by the Tribunal in the instant case. It is not the same as to say that for the purchase and sales which cannot be accounted for, estimated profit be added for computation of income at the rate of 25% of the bogus purchase as those cases need different appreciation from the present kind where claim of purchases and sales is a complete eyewash. Allowing disallowance at the rate of 25% the bogus purchase in cases like present one would amount to endorsing outright conduct of illegality. 13. Resulta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
