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of <h1>High Court upholds Tribunal's decision in tax case on bogus purchases & undisclosed income.</h1> <h3>THE PRINCIPAL COMMISSIONER OF INCOME TAX, GANDHINAGAR Versus M/s. TIRUPATI COTTON AND GRINNING FACTORY</h3> THE PRINCIPAL COMMISSIONER OF INCOME TAX, GANDHINAGAR Versus M/s. TIRUPATI COTTON AND GRINNING FACTORY - TMI Issues:1. Addition on account of bogus purchases2. Deletion of addition on account of undisclosed incomeAnalysis:Issue 1: Addition on account of bogus purchasesThe appellant revenue challenged the order of the Income Tax Appellate Tribunal regarding the addition made on account of bogus purchases from M/s. Vishal Traders. It was found during search/survey action that the purchases shown by the assessee were bogus, as admitted by the proprietor of M/s. Vishal Traders. The Assessing Officer made an addition of the entire claimed amount as bogus purchases, but the Commissioner (Appeals) restricted the addition to 25% of the alleged bogus purchases. The Tribunal upheld the Commissioner's decision. The appellant contended that the assessee failed to provide evidence to substantiate the purchases, and the Tribunal erred in confirming the Commissioner's order. However, the Commissioner found that the purchases were not actual, only bills were obtained, and the goods were purchased from farmers. The Tribunal concurred with the Commissioner's findings, stating that the sales were not disputed by the revenue authorities. The High Court held that no legal infirmity was found in the approach adopted by the Commissioner and the Tribunal, dismissing the appeal.Issue 2: Deletion of addition on account of undisclosed incomeRegarding the deletion of addition on account of undisclosed income, the partner of the assessee admitted to undisclosed income during a survey but did not include it in the return. The Commissioner (Appeals) deleted the addition, stating that it gets telescoped in the addition sustained on account of bogus purchases. The High Court found no infirmity in the Commissioner's approach, even though the Tribunal did not give a specific finding on this issue. The Court concluded that no question of law arose in this matter, warranting interference. Consequently, the Court dismissed the appeal, finding no legal infirmity in the Tribunal's order.
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