Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2017 (10) TMI 174

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. In the present case, t .....

X X X X X X X

Full Text of the Document

X X X X X X X

onfirming 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 justice. 4. In this case, the assessee filed return of income for A.Y. 2011-12 on 29/09/2011 decl .....

X X X X X X X

Full Text of the Document

X X X X X X X

erprises 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/- 5. Against the above order, the assessee appealed before the learned CIT(A) who conformed the action of the assessing officer in making addition of 12.5% of the bogus purchase. The ld. CIT(A) held as under: 5.2 I have perused the assessment order, submissions of appellant, and the facts and circumstance of the case. On careful examination of the same, I observe that under Income Tax Act, 1961 what can be taxed is the real income. Even though the transaction is not verifiable, what is t .....

X X X X X X X

Full Text of the Document

X X X X X X X

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. Simit P. Sheth 356 ITR 451 (Gui) Held, dismissing the appeal, that the Commissioner (Appeals) believed that the purchases were not bogus but were made from the parties other than those mentioned in the books of account. That being the position, not the entire purchase price but only the profit element embedded in such purchases could be added to the income of the assessee. In essence, the Tribunal only estimated the possible profit out of purchases made through non-genuine parties. The estimation of rate of profit return must nec .....

X X X X X X X

Full Text of the Document

X X X X X X X

uch 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 confirmation from any of the party. Assessee has also not been able to produce any of the parties. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario it is amply clear that assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the providers of these bills are bogus and non-existent. 9. The Sales Tax Department in its enquiry have found the parties to be providing bogus accommodation entries. The assessing officer also issued noti .....

X X X X X X X

Full Text of the Document

X X X X X X X

2. 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 Industries vs. Dy CIT, order dt. 20/06.2016, wherein 100% of the bogus purchases was held to be added in the hands of the assessee and tribunals restriction of the addition to 25% of the bogus purchases was set aside. It was expounded that when purchase bills have been found to be bogus 100% disallowance was required. The special leave petition against this order alongwith others has been dismissed by the Hon ble Apex Court vide order dt 16.1 2017. 13. We further note that honble Rajasthan high court has similarly taken note of decisions of the apex court on the issue .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||