2017 (9) TMI 1916

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....order of the learned CIT(A) wherein 25% disallowance on account of bogus purchase amounting to Rs. 4,70,230. 2. In this case Assessing Officer had made a disallowance of Rs. 18,80,918 being 100% of the bogus purchase. Upon assessee's appeal, learned CIT(A) reduced it to 25%. 3. In this regard, I may gainfully refer to the decision of the learned CIT(A) as under:- "5.10 During the co....

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....to discharge the burden. After making independent enquiries, finding of Sales Tax Department and details submitted by the appellant, the AO held that the appellant had not purchased goods from all these above parties and only accommodation bills were taken in order to inflate the expenses and bring down the profitability thereby avoiding the payment of taxes. Hence, purchases amounting to Rs. 18,8....

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....y the assessee which has been rejected as issues of bogus purchases have already been dealt with by the ITAT Mumbai Benches in a number of other cases. 6. Upon careful consideration of the facts of the case, I find that overwhelming evidence have been referred by the authorities below that the impugned purchases are bogus. There is no evidence of the actual movement of the goods under dispute. ....

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....d, 100% disallowance for bogus purchase cannot be done. This proposition is supported from Hon'ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises. However, the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee selling on account of non-payment of tax and others at the expe....