TaxTMI 
TaxTMI 
2023 (11) TMI 1191
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....g Officer and the Appellate Authority erred in creating and upholding addition alleging bogus purchases solely based on the investigation of third party investigating agency (Sales Tax Department) and without making any further inquiries to substantiate such additions. b. The Appellant states and submits that, the Assessing Officer and the Appellate Authority erred in ignoring the fact that the Appellant had already paid MVAT to the Sales Tax Department on the impugned transactions and erred in not reducing the said amount from the additions. c. The Appellant states and submits that, the Assessing Officer and the Appellate Authority erred in creating and upholding addition alleging bogus purchases solely on the basis of th....
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.... marginal delay in filing the appeal, therefore, the delay in filing the appeal is condoned. 3. Fact in brief is that return of income declaring total income of Rs. 8,07,850/- was filed on 30.09.2011. The case of the assessee was reopened by issuing of notice u/s 148 of the Act on 10.05.2013 on the basis of information received from the Sale Tax Department that assessee had obtained bills of bogus purchases from the following parties: Sr. No. Name MVAT No. Amount 1. Akash Steel Traders 27230363523V 173,86,509 Total 1,73,86,509/- During the course of reassessment proceedings the assessing officer has issued various notices and show cause notice, however, the assessee has not made compli....
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....02.2019. After taking into consideration the remand report filed by the assessing officer and submission of the assessee the ld. CIT(A) has restricted the disallowance to the extent of 25% of the bogus purchases. Accordingly, disallowance to the extent of Rs. 43,46,627/- was confirmed and balance amount of Rs. 130,39,882/- was deleted. 5. The revenue has filed appeal against the order of CIT(A) before the ITAT Pune. The ITAT Pune vide ITA No. 05/Pune/2021 for A.Y. 2011-12 dated 28.06.2022 dismissed the appeal of the revenue because of low tax effect as prescribed in the CBDT circular dated 17/2019 and 08.08.2019. 6. During the course of appellate proceedings before us the ld. Counsel filed the affidavit dated 22.09.2023 stating that t....
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....t without carrying out any independent inquiry to establish that assessee has made the bogus purchases. He also stated that the AO has accepted corresponding sales against the purchases and looking to the regular gross profit shown by the assessee in the past years no addition should have been made in the case of the assessee. On the other hand, the ld. D.R submitted that assessee has failed to make any compliance before the assessing officer and he supported the lower authorities. 7. Heard both the sides and perused the material on record. Without reiterating the facts as elaborated above the assessing officer has added the 100% purchases made by the assessee from aforesaid party on the basis of information received from the sale tax....
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....sales made by the assessee. If such purchases are treated as non-genuine then the corresponding sales should also be considered as non-genuine. Therefore, we consider that in such types of transaction only the profit margin embedded in such transaction could be taxed. In such type of cases the assessee procures the material from the grey market by paying cost and as the bills are not available for such transaction, obtains bills from third party who after receipt of cheque from the assessee making him available the cash after deducting its commission. Since the sales were not doubted therefore it was proved that assessee was actually in possession of goods. The assessee has been benefitted by receiving margin of grey market. The gross profi....