AI Drafter 
TaxTMI 
TaxTMI 
2016 (6) TMI 1048
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..../1999 and 405/Ahd/2001 for the Assessment Years 1993-94, 1994-95, 1995-96, 1996-97 respectively, the assessee has preferred the present Tax Appeals. 2. These appeals were admitted for consideration of the following substantial question of law: Tax Appeal No. 1245 of 2006 "Whether on the facts and in the circumstances of the case, the conclusion reached by the Income Tax Appellate Tribunal that the purchases aggregating to Rs. 3,15,952/- were bogus, is such could be arrived at?" Tax Appeal No. 1246 of 2006 "Whether on the facts and in the circumstances of the case, the conclusion reached by the Income Tax Appellate Tribunal that the purchases aggregating to Rs. 11,49,455/- were bogus, is such could be arrived at?" Tax Appea....
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....consideration of the aforesaid substantial question of law. 5. Mr. S.N. Divatia, learned advocate appearing for the assessee submitted that the Tribunal has erred in law and on facts in reversing the order of the CIT and erred in holding that the impugned purchases were bogus and payments for purchases had come back to the assessee. He submitted that the Tribunal has failed to appreciate the evidence produced by the appellant to prove the genuineness of the impugned purchases instead relied upon irrelevant evidence so as to come to the conclusion that the impugned purchases were bogus. He has relied upon the decisions of this court in the following cases: (I) CIT vs. Simit P. Sheth reported in [2013] 38 taxmann.com 385 (Gujarat); (....
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....t on record that no purchase were made at all, counsel for the revenue would be justified in arguing that the entire amount of such bogus purchases should be added back to the income of the assessee. Such were the facts in case of ACIT (OSC) Ward 5(3) Nadiad Vs. Pawanraj B Bokadia (supra). 9. This being the position, the only question that survives is what should be the fair profit rate out of the bogus purchases which should be added back to the income of the assessee. The Commissioner adopted ratio of 30% of such total sales. The Tribunal, however, scaled down to 12.5%. We may notice that in the immediately preceding year to the assessment year under consideration the assessee had declared gross profit @ 3.56% of the total turnover. If....
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....ommissioner of IncomeTax reported in [2009] 316 ITR 274 (Guj) and this Court while deciding the said issue has held as under: 12 Thus, it is apparent that both the Commissioner (Appeals) and the Tribunal have concurrently accepted the finding of the Assessing Officer that the apparent sellers who had issued sale bills were not traceable. That goods were received from the parties other than the persons who had issued bills for such goods. Though the purchases are shown to have been made by making payment thereof by account payee cheques, the cheques have been deposited in bank accounts ostensibly in the name of the apparent sellers, thereafter the entire amounts have been withdrawn by bearer cheques and there is no trace or identity of th....
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....es not require any interference. The questions referred at the instance of the assessee as well as the Revenue are, therefore, answered in the affirmative, i.e., in favour of the Revenue and against the assessee in relation to the questions at the instance of the assessee, and in favour of the assessee and against the Revenue in relation to the questions at the instance of the Revenue.. 8. In view of the above position of law, we are of the opinion that the Assessing Officer's action in treating the purchases as bogus and adding the entire cost of purchases in the assessment ought not to have been restored by the Tribunal. The view taken by the Tribunal in the case of Vijay Proteins Ltd. vs. CIT reported in [1996] 58 ITD 428 (Ahd) has be....