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TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1633
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....ases of Rs. 64,20,135/- made from 2 purchase parties as the assessee failed to prove the genuineness of the said purchases when asked to produce consumption register and labour register by the Assessing Officer." 2) The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the AO be restored. 3) The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. The Assessing Officer in this case has made 100% addition on account of bogus purchases amounting to Rs. 64,20,135. 4. The facts of the case are that the assessee is partnership firm engaged in the business of 'Real Estate Development'. The return of income for the year under appeal was fil....
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....lant failed to furnish the whereabouts of the parties, consumption register for the goods claimed to have been purchased from the parties. In view of the same AO felt that the completeness and correctness of the books of accounts are not established and rejected the same under the provisions of section 145(3) of the Act Purchases made from the two parties were treated as bogus purchases and the total amount of such purchases of Rs. 64,20,135 and added to the total income of the assessee. 6. Upon assessee's appeal learned CIT(A) has noted that the sales has not been doubted. That after having rejected books of accounts Assessing Officer should have made an estimate of profit instead of making disallowance of the impugned purchases amount. A....
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....he appellant, without purchases being made, the construction work cannot be done. Thus, the issue would boil down to finding out the element of profit embedded in bogus purchases which the appellant would have made from some unknown entities. 6.8 In this regard, it is apt to refer to the decision of Gujarat High Court in the case of Bhoianath Poly Fab Pvt. Ltd. 355 ITR 290 (Guj) where the Hon'ble Court was battling with the finding of Hon'ble ITAT that purchases were made from bogus parties since notice issued by the A.O. to these parties were allegedly received`returned/unserved' and the assessee was unable to produce any confirmation from these parties. The Tribunal had held that though purchases were made from bogus partie....
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....ire amounts have been withdrawn by bearer cheques and there is no trace or identity of the person withdrawing the amount from the bank accounts. In the light of the aforesaid nature of evidence it is not possible to record a different conclusion, different from the one recorded by the Commissioner (Appeals) and the Tribunal concurrently holding that the apparent sellers were not genuine, or were acting as conduit between the assessee-firm and the actual sellers of the raw materials. Both the Commissioner (Appeals) and the Tribunal have, therefore, come to the conclusion that in such circumstances, the likelihood of the purchase price being inflated cannot be ruled out and there is no material to dislodge such finding. The issue is not wheth....
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....t High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Hon'ble Court also relied on the decision in the case of Vijay M. Mistry Construction Ltd. 355 ITR 498 (Guj) and further approved the decision of Ahmedabad Bench, ITAT in the case of Vijay Proteins 58 LTD 428. 6.11 The motive behind obtaining bogus bills thus, appears to be inflation of purchase price ^d as to suppress true profits. Considering the facts of the case as well as the various case laws cited (sup....