TMI Blog2020 (9) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... xchequer. In such situation in our considered opinion on the facts and circumstances of the case the 12.5 % disallowance out of the bogus purchases done by the learned CIT-A meets the end of justice. Accordingly we uphold the order of learned CIT-A. Disallowance u/s 43B - assessee had not paid an amount on account of VAT before filing the return of income of the year under consideration - HELD THAT:- As decided in own case [ 2017 (8) TMI 1288 - ITAT MUMBAI] CIT (A) has deleted the addition on the ground that section 43B would attract only to a case where an item is allowable as deduction but because of failure to make payment such deduction would not be allowed. Section 43B is applicable in the case of sales tax and excise duty but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case has made hundred percent addition on account of bogus purchase amounting to ₹ 58,750/-. 3. Upon assessee's appeal learned CIT-A has noted that the sales has not been doubted. Accordingly placing reliance upon several case laws and up on the facts of the case he sustained 12.5 % disallowance out of the bogus purchases. The learned CIT(A) held as under :- 6.2.28 The facts in the present case are similar to the facts in the above mentioned case. In the present case, the Ld. AO has shown that the party in question was non-existent. The appellant has not been able to disprove the findings of the Ld. AO regarding the non-existence of the party. However, Ld. AO after examining the evidences did not give any adverse fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove facts, the Hon'ble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Hon'bie Court also relied on the decision in the case of Vijay M. Mistry Construction Ltd. 355 ITR 498 (Guj.) and further approved the decision of Ahmedabad Bench, ITAT in the case of Vijay Proteins 58 ITD 428. 6.2.30 In the case of Vijay Proteins (supra), the Hon ble ITAT was seized with a case of bogus suppliers of oil cakes where 33 parties were found to be bogus by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 12.5% of the purchases made from the bogus entities, as the suppressed profit element embedded in such purchases. This estimation is in addition to the GP shown by the appellant. Thus, addition of ₹ 7,344/-(being 12.5% of ₹ 58,750/-) is confirmed and the balance is deleted. 4. Against above order Revenue is in appeal before the ITAT. We have heard Ld Dr and perused the records. We find that in this case the sales have not been doubted. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from Honourable jurisdictional High Court decision in the case of Nikunj Eximp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during course of assessment proceedings the Id. AO issued a show cause asking the assessee why not the above mentioned amount payable to the tune of ₹ 2,35,34,263/- should be added to the total income of the assessee u/s 43B of the I.T. Act, 1961. After considering the reply of the assessee, the Id. AO added the same to the total taxable income of the assessee company. 7. Upon assessee s appeal learned CIT(A) relied upon assessee s own case decided by the ITAT for A.Y. 2009-10 and held as under :- After considering the submissions of the assessee the Hon'ble Tribunal held as under: 18. We have heard the rival contentions of the both the parties. We find that the Ld. CIT (A) has deleted the addition on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A). 6.1.2 Respectfully following judgment of Hon'ble ITAT in appellant's own case for AY 2009-10, the addition made by AO u/ s 43B in respect to payable service tax amounting to ₹ 2,08,69,087/- is allowed. Appellant had not furnished any explanation regarding outstanding VAT except relying upon Hon'ble ITAT judgment in appellant's own case for AY 2009-10 in which issue of outstanding VAT was not before the Hon'ble ITAT, hence, addition made by AO u/s 43B on account of outstanding VAT amounting to ₹ 26,65,175/- is confirmed. 8. Upon careful consideration we find that learned CIT(A) has followed ITAT order in assessee s own case. No contrary decision was shown to us. Hence, respectfully ..... X X X X Extracts X X X X X X X X Extracts X X X X
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