Rule of consistency in bogus purchase cases keeps profit addition at 0.2% where facts remain unchanged.

A Revenue appeal based on information from the Investigation Wing about accommodation entries and bogus purchases was treated as falling within the Circular No. 5/2024 exception for organised tax evasion cases supported by external intelligence, so the monetary limit did not bar hearing on merits. On the substantive issue, the Tribunal followed earlier final years and applied the rule of consistency, holding that where books were not rejected and purchase and sales details were not found defective, the profit element in bogus purchases could be restricted to 0.2% of the disputed purchases. The same estimation was therefore maintained absent any material change in facts or law.

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Issues: (i) whether the Revenue's appeal fell within the exception to the monetary limit under Circular No. 5/2024 dated 15/03/2024 in view of alleged accommodation entries and external intelligence, and (ii) whether the addition on account of bogus purchases was to be restricted to 0.2% of the purchases or sustained at a higher rate.

Issue (i): Whether the Revenue's appeal fell within the exception to the monetary limit under Circular No. 5/2024 dated 15/03/2024 in view of alleged accommodation entries and external intelligence.

Analysis: The appeal was based on information received from the Investigation Wing concerning accommodation entries and bogus purchases. Such a fact situation was treated as falling within the exception carved out for organised tax evasion cases based on external intelligence, thereby permitting the appeal to be heard on merits despite the monetary threshold.

Conclusion: The objection to maintainability was rejected and the Revenue's ground on this issue was allowed.

Issue (ii): Whether the addition on account of bogus purchases was to be restricted to 0.2% of the purchases or sustained at a higher rate.

Analysis: The estimation of profit embedded in bogus purchases was examined in the light of the assessee's own earlier years, where the Tribunal had restricted the addition to 0.2% and those decisions had attained finality. The books of account were not rejected, the quantitative details of purchases and sales were not found defective, and the same facts prevailed for the year under consideration. Applying the rule of consistency and judicial discipline, the earlier view was followed.

Conclusion: The addition was rightly restricted to 0.2% of the disputed purchases and the Revenue's challenge on the quantum failed.

Final Conclusion: The appeal succeeded only on the maintainability objection and failed on the substantive addition, leaving the estimate of profit on bogus purchases unchanged at 0.2%.

Ratio Decidendi: Where the facts are identical across assessment years and the earlier decision on bogus purchases has attained finality, the profit element embedded in such purchases may be estimated consistently at the rate previously upheld, unless a material change in facts or law is shown.

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