TaxTMI 
TaxTMI 
2013 (8) TMI 1098
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....e reproduced herein under for reference:- "1. The learned CIT(A) erred in law and on facts in confirming addition to the extent of Rs. 7,17,500/- u/s. 69C of the I. T. Act, out of the total addition of Rs. 12,73,423/- made by the A. O. in the I. T. Assessment for A. Y. 2007-08 towards alleged bogus purchased. 2. That the learned CIT(A) erred in law and on facts in not appreciating the merits of the appellant's submissions that keeping in view the ratio of the ITAT decision in ITA No.390/Ahd/2006 dated 19-12-2008, which was squarely applicable in the facts of the appellant's case, the maximum addition that could be sustained was only 25% of the alleged bogus purchases." 3. The facts of the case are that the assessee is a....
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....purchases. (vi) There was no compliance from the parties in response to summons issued by this office. 3.2 Further, it was observed by the learned AO that the alleged suppliers from whom the assessee had purchased goods have denied the sale made to the assessee. For the aforesaid reasons, the learned AO rejected the claim of expenditure of purchases of Rs. 12,73,423/- and added to the income of the assessee. 4. When the matter crept up before the learned CIT(A), the learned CIT(A) keeping in view of the decisions of ITAT, Ahmedabad Bench in (i) ITA No. 1785 to 1787/Ahd/2008 and ITA No.1994 to 1996/Ahd/2008 dated 20-10-2008 in the case of Manohar Metal Corporation and (ii) ITA No.390/Ahd/2006 dated 19-12-2008 in case of Pawanr....
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....of Rs. 7,14,500/- has to be confirmed under section 69C of the IT Act. So far as the balance purchases of Rs. 5,58,923/- are concerned, in respect of which payment has been made, the addition is restricted to 25% of such purchases in view of the decision quoted by the appellant. Thus, this ground of appeal is partly8 allowed. ." 4.1 Against this order of the learned CIT(A), the assessee is now in appeal before us. 5. At the time of hearing before us, the learned AR reiterated the submissions made before the revenue authorities and relied upon the order of the ITAT Ahmedabad "D" Bench dated 19-12-2008 passed in ITA No.390/Ahd/2006 for assessment year 2002-03 in the case of Pawanraj B. Bokadia Vs ACIT (copy placed on record) and prayed ....
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..... Both the parties before us agreed that 25% of the bogus purchases will be fair and reasonable amount for disallowance as inflation in purchases. We therefore modify the orders of the lower authorities and restrict the disallowance to 25% of the bogus purchases. Thus, this ground of appeal of the assessee is partly allowed." 6.1 In the present case before us, the fact is that, the learned AO had disallowed Rs. 12,73,423/- being bogus purchases made from M/s. Bhagyodaya Enterprise. The learned CIT(A) has sustained the addition to 25% of Rs. 5,58,923/- ie for the actual payment made and Rs. 7,14,500/- being the credit balance for which payment is not made, following the decision of the Tribunal. However, from the facts and circumstances o....