TaxTMI 
TaxTMI 
2022 (9) TMI 1324
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....abad delivered in common ITA No. 1798 of 2019 to ITA No. 1800 of 2019, in so far as the said common judgment relates to ITA No. 1800 of 2019 for the assessment year 2010-11. 2. The revenue has proposed that substantial question of law arises in respect of the issue where the Appellate Tribunal has restricted the addition made on account of bogus purchases to the extend of 5% of such purchases and in that the Tribunal has overlooked the decision of the High Court in the case of M/s N. K Industries Ltd. V/s Deputy Commissioner of Income Tax reported in [2017] 292 CTR 354 Gujarat. 3. The assessee has filed return of income for the assessment year 2010-2011 on 30.9.2011 declaring total income of Rs.10,80,530/-. The assessee is an individu....
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.... assessee were audited under section 44AB of the Act, quantitative details were maintained and the alleged bogus biller have valid sales tax numbers and goods purchased from them were sold by the assessee which is not in dispute. It was also submitted before CIT(Appeals) that for the financial years 2007-2008,2008-2009 and 2009-2010 Gross Profit Ratio was 3.08%, 4.71% and 3.87% respectively. It was also pointed out that previous year Gross Profit Ratio and current year Gross Profit Ratio did not show any material variation so as to doubt the alleged bogus purchases. 3.3 CIT(Appeals) after considering the submissions made by the assessee and relying upon various judgments restricted the addition by estimating 5% of the alleged bogus purch....
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....ame at 10% of alleged bogus purchases i.e. Rs.14,91,767/-. We do not find any infirmity in the approach of the ld.CIT(A) in restricting the impugned additions, and therefore, his order does not warrant our intervention in this score. We confirm the order of the 1ld.CIT(A) and dismiss this ground of appeal of the Revenue." 4. Learned Senior Advocate Mr. Manish Bhatt for the Revenue submitted that the decision of CIT(Appeals) as well as the Tribunal are erroneous and perverse in view of the ratio laid down in case of M/s N. K Industries Ltd.(supra), wherein it is held by this Court that addition on basis of bogus purchases could not be restricted to certain percentage when the entire transaction was found as bogus. 5. On going through t....
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....that is bogus purchases were on the basis of the fictitious invoices debited in the trading account. The Tribunal made 25% of the total purchase on the ground that the purchase was from bogus suppliers. It was held by the High Court that the Tribunal should have made addition of total purchase and not 25%. 5.3 However, the facts of the present case are entirely different in absence of any dependable material for the Assessing Officer to come to the conclusion about the bogus purchases made by the assessee to make addition of the entire purchases under section 68 of the Act as income for the year under consideration. CIT(Appeals) and the Tribunal therefore, considering the possibility of bogus purchases on the basis of documentary evidenc....