Bogus Purchase Bill

[Asked by Guest]

Dear Sir,

My purchases have been proved to be bogus.Will sales related to such purchase will also be bogus and assessee will be able to claim lower tax benefit.Please refer case law or section supporting answer.

Thanks & Regards

Prashant

[Ganeshan Kalyani]

If bogus purchase is made then the set off is reduced by that amount resulting in payment of tax. Some case stated that though bogus purchase is made purchaser will be allowed to take the credit.

AI Summary

Bogus purchases can trigger denial or reduction of input credit, affecting taxable liability under relevant tax rules.
Where purchases are found to be bogus, the claimant's set-off or credit is reduced by the amount attributable to those purchases, increasing taxable liability; however, some authorities have permitted purchasers to retain the credit despite bogus invoices, creating a conflict of decisions that depends on factual and evidentiary considerations.