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Shri Hitesh Tilokchand Bohra Versus Income Tax Officer-19 (1) (5) , Mumbai

2018 (1) TMI 581 - ITAT MUMBAI

Reopening of assessment - addition of 6% of the bogus purchases - Held that:- After making detailed enquiries the AO reached to the conclusion that out of the total purchases 87.5% of the alleged purchases are genuine whereas purchase to the tune of 12.5% was bogus. Accordingly he added only 12.5% of such alleged bogus purchases. After considering various judicial pronouncements the CIT(A) has further restricted the addition to the extent of 6%. The CIT(A) has relied on various judicial pronounc .....

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der of the CIT(A)-29, Mumbai for assessment years 2010-11 & 2011-12 in the matter of order passed under Section 143(3) r.w.s. 147 of the Income Tax Act. 2. In these appeals the assessee is aggrieved for reopening of assessment as well as for upholding the addition of 6% of the bogus purchases. 3. Nobody appeared on behalf of the assessee in spite of giving opportunity. The Bench therefore decided to disposed of the appeals after considering the material placed on record and hearing the conte .....

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assessee is involved in taking accommodation entries of bogus purchases from four parties amounting to Rs. l,62,20,028/-. On the basis of this information, the AO has issued notice u/s.143 and completed the assessment proceedings under section 143(3) r.w.s.147 on 29.01.2016. The AO observed that the Sales Tax Department has classified these parties as hawala dealers. It was evident from the report of the Sales Tax Department and statements recorded by them that purchases shown by the assessee f .....

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ssessee was also asked to produce the books of accounts. The AO held that though few details were furnished, it could not link the purchases with corresponding sale and books of accounts were also not produced for verification and hence no verification could be made and further proceeded to make an addition of 12.5% on the alleged bogus purchases of ₹ 1,62,20,028/-. 5. By the impugned order the CIT(A) reduced the addition from 12.5% to 6% after observing as under: - 4.3. The submissions ha .....

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the above mentioned patties. In such a scenario, as the purchases have not been established as genuine, the AO had to estimate some profit which the assessee had failed to offer to tax. The Ld. Counsel also argued that the AO cannot hold 87.5% as genuine and 12.5% as bogus. The AO has no where certified that 87.5% of the alleged purchases are genuine and 12.5% are bogus. What the AO had done is to estimate the additional profit which the assessee would have earned by way of purchasing from the .....

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ealt with similar case where some of the alleged suppliers who had issued bills to the assessee were not genuine as they were not traceable. The goods must have been received from other parties. The likelihood of the purchase price of these alleged purchases being inflated could not be ruled out and therefore the Hon'ble High Court has upheld the decision of CIT(A) and the ITAT disallowing 25% of the payments made to such parties. The Hon'ble High Court of Gujarat in the case of CIT vs. .....

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