2021 (4) TMI 333

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.... the assessee is aggrieved that learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] has erred in sustaining 12.5% disallowance on account of bogus purchases, vide order dated 23.1.2018 pertaining to assessment year 2009-10. 2. The grounds of appeal read as under :- "On the facts and in the circumstances of the case and in the law the Ld. CIT (A) - 48, Mumbai has erre....

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.... and its accessories. The return of income for the year under appeal was filed on 29-09-2009 declaring total income of Rs. 9,61,810/- and the return was processed u/s 143(1). Thereafter on the basis of information received in respect of hawala transactions, proceedings were initiated u/s 147 of the Act. The assessment u/s. 143(3) rws 147 was completed by the Assessing Officer on 13.03.2009 determi....

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....urnish the confirmation from the party that it had actually sold and delivered material to the appellant company and hence, the sum in respect of investment made out of unaccounted money by the appellant for purchase of materials from the party of Rs. 29,95,668/- was treated as bogus purchases and made an adhoc addition of Rs. 3,74,459/- being 12.5% of the said expenses and added to the total inco....

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.....2014). In this case the honourable High Court has upheld hundred percent allowance for the purchases said to be bogus when sales are not doubted. However in that case all the supplies were to government agency. In the present case the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of n....