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TMI Blog2017 (12) TMI 1797X X X X Extracts X X X X X X X X Extracts X X X X ..... rong and contrary to the provision of the Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in upholding the addition of Rs. 28,47,360/- to the Returned income by treating genuine purchases as ingenuine u/s. 69C of the I. T. Act and the reason assigned for doing so are wrong and contrary to the provision of the Income Tax Act and rules made thereunder. 3. In this case, for the year under consideration, the assessee had claimed purchases at Rs. 86.74 lacs. During the course of assessment proceedings, in order to verify the genuineness of purchases, notices u/s. 133(6) of the Income-tax Act, 1961 were issued to several parties at the address provided by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the necessary enquiry. The issue of notice to all the parties have returned unserved. Assessee has not been able to provide any confirmation from any of the party. Assessee has also not been able to produce any of the parties. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that the assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills is bogus and non-existent. 7. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. The assessing officer also issued notices to these parties at the addresses provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , order dt. 18.6.2014). In this case the Hon'ble High Court has upheld 100% allowance for the purchases said to be bogus when sales are not doubted, although facts of that case was a little different inasmuch as all sales was to government department. However, the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of nonpayment of tax and others at the expense of the exchequer. In such situation, in my considered opinion, on the facts and in circumstances of the case, 12.5% disallowance out of the bogus purchases meets the end of justice. This proposition draws support from the Hon'ble Gujarat High Court decision in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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