2018 (1) TMI 1412

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.... that the learned Commissioner of Income Tax (Appeals)-53, Mumbai ('ld.CIT(A) for short) dated 25.01.2018 has erred in sustaining 12.5% disallowance on account of bogus purchases for the assessment year (A.Y. for short) 2009.10. 2. The grounds of appeal read as under:- 1. (a) On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the action of the A.O and approving th....

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....d in dismissing the ground for the appellant's plea of withdrawal of initiation of penalty proceedings u/s 271(1) (c). 3. The assessing officer (A.O. for short) in this case has made 12.5% addition on account of bogus purchase amounting to Rs. 9,44,174/-. 4. Upon the assessee's appeal, the ld. CIT(A) confirmed the same. 5. Against the above order, the assessee is in appeal before the ITAT.....

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....e suppliers. I find that in this case the sales have not been doubted. It is settled law that when sales are not doubted, 100% disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from the Hon'ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (in writ petition no 2860, order....

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....he gross profit already shown by the assessee and offered to tax should be reduced from the standard 12.5% being directed to be disallowed on account of bogus purchase. 8. Upon careful consideration, I find considerable cogency in the submission of the learned counsel of the assessee, as otherwise it will be double jeopardy to the assessee. Accordingly, I modify the order of learned CIT-A and dir....