2021 (10) TMI 1323

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....1. Appellant is impugning an Order pronounced on 18/11/2015 by Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT') while disposing of Appeal filed by Respondent and cross-Appeal filed by Appellant and is proposing the following substantial questions of law : "A. Whether on the facts and in circumstances of the case and in law, the Hon'ble ITAT erred in not relying on the....

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....s of purchases made, though the onus lies on the assessee to prove the same. In the absence of unexplained sources of the cash payments, the AO ascertained that the assessee had made cash purchases from undisclosed parties and arranged the bills from parties, who were hawala operators." 2. Mr. Sharma submitted that procuring bogus bills does not itself represent any business transaction and the....

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.... purchases, it was not possible for assessee to carry out the work of this magnitude and purchase of material in cash from open market cannot be ruled out. This is a finding of fact and therefore there cannot be an offence as provided in the Explanation to Section 37. 3. Mr. Sharma also submits that under Section 40A(3) if the assessee incurs any expenditure in respect of which a payment or agg....

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....e to be led to determine what would be the actual profit margin in the business that Assessee was carrying on and the matter of calculations by the concerned authority. According to the Tribunal, in all such similar cases, it is ranged between 5% to 12.5% as reasonable estimation of profit element embedded in the bogus purchase when material consumption factor do not show abnormal deviation. 5.....