TaxTMI 
TaxTMI 
2017 (5) TMI 1811
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....ated 27-02-2014 u/s 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only common issue in three appeals of Revenue is as regards to the order of CIT(A) restricting the addition made by AO on account of bogus purchases at Rs. 6,22,297/- at the rate of 12.5% of the bogus purchases added by AO at Rs. 49,78,373/- in AY 2009-10, at Rs. 11,86,274/- @ 12.5% of the bogus purchases added by the AO at Rs. 94,90,188/- in AY 2010-11 and added Rs.4,60,177/- @ 12.5% of the bogus purchases added by AO at Rs. 36,81,412/- in AY 2011-12. For these three years Revenue has raised identical worded grounds and the issue is also exactly identical i.e. bogus purchases made by assessee from entry providers / hawala operato....
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.... Sr. No Name of Parties Amount Involved (Rs.) 1 Ankit Enterprises 2,32,564 2 Ambika Sales corporation 1,221,567 3 Paras Enterprises 2,96,798 4 Gold Star Trading Co. 1,93,0483 Total 36,81,412 4. According to AO, the above purchases in three years, the assessee has made from the hawala parties who are only issuing bogus sale bill without delivery of goods. This information was as per the office of Director of General Income Tax Investigation, Mumbai, wherein they further received information from Sales Tax Department Govt. of Maharashtra regarding cases relating to bogus purchases / hawala transactions from the hawala parties. Further, according to above parties mentioned in the c....
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....llegedly 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 parties, nevertheless, the purchases themselves were not bogus as the entire quantity of opening stock, purchases and sales were tallying and hence, only the profit margin embedded in such amount would be subjected to tax. The Hon'ble Gujarat High Court taking cognizance of the fact held that whether purchases themselves were bogus or whether parties from whom such purchases were made were bogus, is essentially a question of fact and the Tribunal having examined the evidence on record and concluded that the assessee did produce cloth and sell finished goods....
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....e appellant is engaged. Hence, in the facts and circumstances of the case and in view of CIT vs Simit P. Sheth (supra), I hold that the profit element embedded and suppressed in the alleged purchases were to the extent of 12.5%. Hence, addition to the extent of 12.5% is upheld and balance is deleted. Accordingly, these grounds of appeal are partly allowed." Aggrieved, now Revenue is in appeal before us. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee partnership firm is engaged in the business of civil contractor carrying out work of repairs, construction, drainage pipeline and other works allotted by Municipal Corporation of Greater Mumbai. The assessee has ma....