2022 (10) TMI 1117

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....ates to ITA No. 1799 of 2019 for the assessment year 2011-12. 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 10% 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 2011-2012 on 28.09.2011 declaring total income of Rs.13,51,944/-. The assessee is an individual running a proprietory concern being a dealer of Chemicals. The case of the assessee was selected for scruti....

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....bai Bench in case of Shri Tagaram G. Prajapati v. ITO in ITA No. 1613, 1614 and 1615/Mum/2008 restricted the addition by estimating 10% of the alleged bogus purchases i.e. 10% of Rs. 6,45,676/-. 3.4 Revenue being aggrieved by the decision of the CIT(Appeals) preferred appeal before the Income Tax Appellate Tribunal (For short "the Tribunal"). 3.5 The Tribunal after considering the order of CIT(Appeals) and the documentary evidence produced by the assessee before the appellate authority held as under : "8. After hearing, the ld.DR, we have gone through the record carefully and also orders of the Revenue authorities. We find that the impugned addition on account of alleged bogus purchased was made by the 1d.AO on account of inf....

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.... 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 the orders of the Assessing Officer, CIT(Appeals) and the Tribunal, it appears that the Assessing Officer has made addition only on the basis of information received from the the Sales Tax Department of State of Maharashtra without any further inquiry being carried out whether the purchases made by the assessee were genuine or not so as to come to the conclusion that the assessee was also one of the beneficiaries of bogus billing of the said three parties and therefore, addition under section 68 of the Act made by the Assessing Officer on that basis was rightly not held to be justifi....