TMI Blog2008 (5) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... this common order. 2. The only ground raised by the assessee is against the addition of ₹ 12,77,686/- sustained by the learned Commissioner of Income Tax (Appeals) on account of bogus purchase made by the assessee while in ITA No.2801 and 2937/Ahd/2008 the Revenue's appeal, the only ground raised is against the relief of ₹ 29,81,266/- allowed by the learned CIT(A). 3. The facts of the case are that the assessee derives income from trading in iron, angles, plates etc. During the course of investigation, it was found by the Assessing Officer that the purchases claimed to have been made by the assessee from M/s.Girnar Sales Corporation and Shiv Metal Corporation were bogus. The total purchases made from the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has maintained complete quantitative details of the goods claimed to have been purchased from the above parties. Quantity of good purchased from above two parties was duly recorded in the books of accounts and have been reflected in the sales/closing stock. He further stated that the assessee is only trader in the iron and steel. He therefore stated that the facts of the assessee's case are similar to Vijay Proteins and several other decisions of the ITAT wherein some percentage of the bogus purchases is disallowed. He also referred to the decision of the ITAT in the case of ITO Vs. Sun Steel, 92 TTJ (Ahd) 1126 wherein the only disallowance of ₹ 50,000/- out of bogus purchase was made. He also referred to the decision of ACIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in this case has made a thorough investigation. He had taken pain to trace the payment for purchases made by the assessee from the bank account and at page no.5 of the assessment order has recorded the finding with regard to each payment. Perusal of which clearly shows that the entire payment made by the assessee was by cheque and was debited in the assessee's bank account. Since the assessee has made the payment by cheque, which is duly debited in the assessee's bank account, the same cannot be said to be unexplained payment. Therefore, in our opinion, there was no justification for making the addition of ₹ 26,76,559/- as unexplained payment. 9. So far as the bogus purchase is concerned, we find that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire material, we are of the opinion that the assessee did not purchase the goods from the parties mentioned in the sales bill. At the same time, it did purchase the goods from some other suppliers, may be without bill. Therefore, purchase rate as mentioned in the alleged sales bill cannot be accepted. Any person indulging in the practice of purchasing goods from the grey market and obtaining bogus bills of some other parties, would do so for getting some benefit. But what would be the magnitude of the benefit would depend upon facts of each case. In the case of Vijay Proteins, ITAT held that such benefit to be 25% and therefore sustained the disallowance for bogus purchase at 25%. In the case of Sunsteel (supra), the ITAT deemed it fit to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - as against the addition of ₹ 27,39,407/- made by the Assessing Officer. However, the learned Commissioner of Income Tax (Appeals) considering the facts of the assessee's case, has sustained the addition at 12.5%. While doing so, he has also relied upon the decision of the Tribunal in the case of M/s.Vijay Proteins Ltd., 55 TTJ (Ahd) 76. In the case of M/s. Vijay Proteins Ltd., the Tribunal has sustained the addition of 25% of the bogus purchases. However, considering the facts of the assessee's case the CIT(A) restricted the disallowance to 12.5% as against 25% made in the case of M/s.Vijay Proteins Ltd. From these facts it is evident that the CIT(A) has sustained the addition at 12.5% of the non-genuine purchases considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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