TMI Blog2017 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 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. 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 - Decided against assessee. - I.T.A. No. 730/Mum/2015 - - - Dated:- 3-10-2017 - SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM For The Appellant : None For The Respondent : Shri Ram Tiwari ORDER Per Shamim Yahya, A. M.: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case and without prejudice to the above, the Learned CIT (A) has erred in confirming disallowance @ 12.5 % of the alleged bogus while confirming that disallowance ought to be made on Gross Profit /Net Profit basis. Appellant pleads that the disallowance has been based on the profit of other entity (Profit @ 12.5 % in CIT vs Simit P. Sheth 356 ITR 451 (Guj)). Appellant pleads that its Gross Profit'for the year was 10.57 % and Net Profit was 0.96 %. Considering that tax is payable on the Net Profit, appellant pleads that disallowance was needed to have been restricted to the Net Profit @ 0.96 %. 4. The order under appeal is not only bad in law and invalid, but also against the principals of natural law of equity and just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases as under: Sr.no. Name of Party Amount (in Rs.) 1. M/s. Ankit Enterprises 42,59,263/- 2. M/s. Maulik Steel Corporation 40,29,858/- 3. M/s. Vaishali Enterprises 44,90,484/- 4. M/s. Keval Enterprises 10,06,252/- 5 M/s. R.S. Enterprises 47,25,023/- TOTAL 1,85,10,980/- Disallowance @ 12.5 % of ₹ 1,85,10,980/- 23,13,873/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x-I Vs it P Sheth ,356 ITR 451 and M/s. Bholenath Poly Fab Pvt. Ltd. Vs AO, 355 ITR 290. In the decisions the GP/NP should be adopted to decide just type of cases. CIT V/s. Bholanath Poly Fab Pvt. Ltd. 355 ITR 290 (Guj.) Held, dismissing the appeal, that whether the purchases themselves were bogus or whether the parties from whom such purchases were allegedly ma.de were bogus was essentially a question of fact. The Tribunal having examined the evidence on record came to the conclusion that the assessee did purchase the cloth and sell the finished fabrics. Therefore, as a natural corollary, not the entire amount covered under such purchases, but the profit element embedded therein would be subject to tax. 2. CIT y/s. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is disposed off by hearing the ld. DR and perusing the records. 8. We find that credible and cogent information was received in this case by the assessing officer that certain accommodation entry provider/bogus suppliers were being used by certain parties to obtained bogus bills. The assessee was found to have taken accommodation entry/bogus purchase bills during the concerned assessment year from different parties. Based upon this information assessment was reopened. The credibility of information relating to reopening remains un-assailed. In such factual scenario, the assessing officer has made the necessary enquiry. The issue of notice to all the parties have returned unserved. Assessee has not been able to provide any confirmatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and thus bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of above apex court decisions. 11. We further find that Hon'ble jurisdictional High Court in the case of Nikunj Enterprises has upheld 100% allowance for the purchases when the sales have not been doubted. However, the facts of that case were different. Furthermore, the sales in that case were basically to government departments. Hence, the ratio from this decision is not applicable on the facts of the case. 12. In these circumstances, the ld. Departmental Representative has referred to Hon ble Gujarat High Court decision in the case of Tax Appeal No. 240 of 2003 in the case of N K Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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