TMI Blog2020 (11) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... e done. The rationale being no sales is possible without actual purchases. In the present case the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. As regards the quantification of the profit element embedded in makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in short learned CIT(A)] has erred in sustaining 12.5% disallowance on account of bogus purchases, vide order dated 25.1.2019 pertaining to assessment year 2009-10. 2. Brief facts of the case are that assessee in this case is engaged in the business of trading in computer parts and peripherals. The Assessment in this case was reopened upon receipt of information from the sales tax Department th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce the suppliers. I 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 Enterprises (in writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed on account of bogus purchases. 6. Upon careful consideration I find considerable cogency in the above submissions. Accordingly I direct that disallowance in this case be restricted to 12.5% of the bogus purchase as reduced by the gross profit already declared by the assessee. Learned counsel of the assessee fairly agreed to the above 7. In the result, Revenue s appeal stands dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
