AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 564
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....rchases from 12.5% to 2%, while the assesee is challenged that the sustainance of 2% addition on the bogus purchases. 3. Brief facts of the case are that the assesee is a manufacture, importer and exporter and trader of cut and polished diamonds. The assessment has been framed pursuant to search action Under Section 132 of the Act conducted by investigated wing of the Department in Rajendra Jain Group. Pursuant to the information that assesee has obtained bogus purchase bills from the entities belonging to the group, the Assessing Officer made 12.5% of the bogus purchases addition by holding as under:- "4.5 The assessee's submissions have been considered at length, but I am not inclined to accept the same due to the following reasons....
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....t to find out whether the onus in a particular case has been duly discharged. It all depends on the facts and situations of the case." (b) Chemaux Private Ltd. Vs. Commissioner of Income-Tax 109 ITR 134: "Complete proof is to be given by the person who has claimed the expenditure, that he has incurred the same for the business purpose" Consideration of all the above material facts clearly state that the assessee has not made any actual purchases from the two parties M/s. Mayank Impex, M/s.Dharam Impex but has only taken bogus bills /accommodation entries from the concerns without actual delivery of any goods/materials. 4.6 However, the assessee has submitted that for the each of purchases made, have been utilized towards sales. ....
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....foresaid two hawala parties as reported hereinabove to suppress its true profits. Having regard to the facts and circumstances of the case as well as Gujarat High Court decision in the case of Simit P. Sheth (2013) [356 ITR 451 (Guj.)], I hereby estimate the G.P. percentage at 12.5%, being the possible profit out of the purchases made through non-genuine parties known as tainted purchases and therefore, I hereby make an addition of Rs. 68,88,895/- [12.5% of Rs. 5,51,11,159/-]. Further, on the similar issue in assessee own case in the previous year i.e A.Y. 2008-09, 2011-12 and 2013-14 ,scrutiny assessment was completed and the department has taken the similar stand and considering the facts and circumstances of the case there is no reason t....
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....ce cum delivery challans, copy of bank statements, highlighting payment made to Mayank lmpex and Nazar Impex Pvt. Ltd were also filed. Details of opening stock purchases and sales and closing stock details along with quantitative tally in carats. Stock register for purchase and corresponding sales in the form of export, purchases against "H" forms and corresponding export sales forms were also filed. Since there was export of the goods alleged to be purchased through bogus suppliers, 1 % addition on account of VAT is not warranted. Accordingly, we modify the order of the CIT(A) to restrict the addition to the extent of 2% of the bogus purchases in place of 3% as upheld by him. 9. In the result, appeals of the revenue are dismissed on the....
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....hence, the addition made are not valid. Therefore, the finding given by my predecessor in the appellant's own case for AYs 2008- 09 & 2011-12 in Appeal No. CIT(A)-10/ACIT-5(3)(2)/435 & 434/2015-16 dated 29/08/2016 will apply mutatis mutandis to the assessment years under consideration. The ruling of the Hon'ble Tribunal , Mumbai 'F' Bench vide order dated 13/08/2018 in Appellant's own case in ACIT- 5(3)(2) Vs. M/s Sunraj Diamonds Exports Pvt. Ltd, ITA No. 6757 & 6758/Mum/2016 and ITA No. 6730 & 6731/Mum/2016 modifying the order of the CIT(A) to restrict the addition to the extent of 2% of the bogus purchases in place of 3% as upheld by him, would also be equally applicable to the years under consideration. 6.3.4 Thus ....
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....l have the liberty to seek restoration of the appeal if the tax effect is found above the limit so fixed by the CBDT. 7. As regards to the assessee's appeal, the learned Counsel for the assessee has pleaded that the ratio of this decision from Hon'ble Jurisdictional High court in the case of Pr. CIT vs. Mohommad Haji Adam & Co. in Income Tax Appeal No. 1004 of 2016 and others vide order dated 11th February, 2019 should be followed and only the difference between the gross profit on genuine purchases and bogus purchases should be added. 8. We find that in the decision of Hon'ble Jurisdictional High Court in the case of Mohommad Haji Adm. & Co. (supra), the Hon'ble High Court upheld the decision in ITAT's order in that case. The issue in th....