2020 (9) TMI 410

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....tax. The assessee in this case is engaged into business of civil engineers works. The assessment was reopened upon information from sales tax department that assessee has made purchases from bogus dealers. 2. The assessing officer in this case has made hundred percent addition on account of bogus purchase amounting to Rs. 58,750/-. 3. Upon assessee's appeal learned CIT-A has noted that the sales has not been doubted. Accordingly placing reliance upon several case laws and up on the facts of the case he sustained 12.5 % disallowance out of the bogus purchases. The learned CIT(A) held as under :- "6.2.28 The facts in the present case are similar to the facts in the above mentioned case. In the present case, the Ld. AO has s....

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....ssee had indeed purchased though not from named parties but other parties from grey market, partially sustained the addition as probable profit of the assessee. The Tribunal however, partly sustained the addition. Taking into account the above facts, the Hon'ble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Hon'bie Court also relied on the decision in the case of Vijay M. Mistry Construction Ltd. 355 ITR 498 (Guj.) and further approved the decisio....

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....motive behind obtaining bogus bills thus, appears to be inflation of purchase price so as to suppress true profits. Considering the facts of the case as well as the various case laws cited (supra), I estimate the suppressed profit to the extent of 12.5% of the purchases made from the bogus entities, as the suppressed profit element embedded in such purchases. This estimation is in addition to the GP shown by the appellant. Thus, addition of Rs. 7,344/-(being 12.5% of Rs. 58,750/-) is confirmed and the balance is deleted." 4. Against above order Revenue is in appeal before the ITAT. We have heard Ld Dr and perused the records. We find that in this case the sales have not been doubted. It is settled law that when sales are not doubted, hun....

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....nted out that the assessee had not made payment of VAT payable for the current year to the tune of Rs. 26,56,175/- and service tax for the Financial Year 2011-12 to the tune of Rs. 2,08,69,087/-. In view of these facts during course of assessment proceedings the Id. AO issued a show cause asking the assessee why not the above mentioned amount payable to the tune of Rs. 2,35,34,263/- should be added to the total income of the assessee u/s 43B of the I.T. Act, 1961. After considering the reply of the assessee, the Id. AO added the same to the total taxable income of the assessee company. 7. Upon assessee's appeal learned CIT(A) relied upon assessee's own case decided by the ITAT for A.Y. 2009-10 and held as under :- "After conside....