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TMI Blog2020 (4) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... ") in ITA No.2377/Ahd/2015 for assessment year 2009-10 and ITA No.2378/Ahd/2015 for assessment year 2010- 11 by proposing the following two common questions, stated to be substantial questions of law. The questions as proposed in Tax Appeal No.713 of 2019 read thus :- "(A) Whether the Appellate Tribunal had erred in law and on facts in deleting the disallowance of M/s. Dharmesh Trading Company at Rs. 13,83,471/-, Jain Corporation at Rs. 17,36,445/-, Krsna Enterprise at Rs. 13,73,964/-, Om Enterprise at Rs. 20,99,599/- and Yash Impex at Rs. 24,41,674/- and directing the Assessing Officer to compute the profit on the alleged bogus purchases @ 12.5%? (B) Whether the Appellate Tribunal has erred in law and on facts in not following the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 143(3) read with section 147 of the Act on 27.8.2014 determining the revised assessed income at Rs. 1,68,70,980/- after making disallowance of Rs. 90,35,153/- on account of bogus purchases. During the course of assessment proceedings, the Assessing Officer had received information from the Value Added Tax Department about the assessee having made bogus purchases from parties namely M/s. Dharmesh Trading Company of Rs. 13,83,471/-, Jain Corporation of Rs. 17,36,445/-, Krsna Enterprise of Rs. 13,73,964/-, Om Enterprise of Rs. 20,99,599/- and Yash Impex of Rs. 24,41,674/- without any movement of goods. The entry provider Shri Mitesh Hakani admitted that they were engaged in the business of issuing bogus sale invoices without mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll year, the purchases cannot be said to be genuine, more so, when the assessee had totally failed to prove the movement of goods transacted. 6.1 It was further submitted that the assessee had failed to submit any details in respect of movement of goods with vehicle numbers, both in respect of purchase items and sale items, though specifically asked for by the Assessing Officer during the course of assessment proceedings. It was submitted that in the absence of any details and evidence of movement of goods and freight payment, the transactions of purchase and sale cannot be said to be genuine, and hence, the Commissioner (Appeals) as well as the Tribunal were not justified in partly allowing the said ground of appeal. It was, accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer to show that the assessee had tried to inflate the raw material purchases. On examination of the record and the details furnished by the assessee, it was found that the assessee was issuing separate bills for material consumed against the construction at different sites, and labour bills in respect of those works were issued separately. Therefore, it was possible to reconcile the amount of material consumed at each site. The assessee had given reconciliation of the material purchased and consumed. Having regard to the fact that the assessee was able to reconcile the quantity of purchases with the consumption and the bills issued, the Commissioner (Appeals) found that the assessee had purchased raw materials from one person and ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of this court in CIT v. Simit P. Sheth, (2013) 219 Taxmann 85 (Guj.), wherein the Commissioner (Appeals) had found that the assessee had made purchases, though not from the named parties but other parties from grey market, and sustained addition of 30% of purchase cost as probable profit of the assessee. The Tribunal, however, sustained addition to the extent of 12.5%. This court held that since purchases were not bogus, but were made from parties other than those mentioned in books of account, it was only the profit element embedded in such purchases that could be added to the assessee's income, and upheld the decision of the Tribunal. The Commissioner (Appeals) further placed reliance upon the decision of this court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted out to this court to dislodge the concurrent findings of fact recorded by the Tribunal, nor is there anything to show that the Tribunal has placed reliance on any irrelevant material or that any relevant material has been ignored. 7.4 In the opinion of this court, having regard to the fact that goods were in fact purchased though not from the named parties but from the grey market, no infirmity can be found in the approach adopted by the Commissioner (Appeals) in restricting the addition to 12.5% of such bogus purchases, which would be the approximate differential amount between the actual price of the goods and the expenditure claimed on the basis of the bogus bills. The Tribunal was, therefore, wholly justified in upholding the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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