TaxTMI 
TaxTMI 
2024 (7) TMI 1138
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....ment year (AY) 2014-15. Grounds of appeal raised by the Revenue are as under: "i) On the facts and in circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition made by the Assessing Office from 100% of the unverifiable purchases to 6% of such purchases and allowing the appeal of the assessee partly ignoring the facts that these purchases are sham transactions fabricated through bogus paper concerns of Shri Bhanwarlal Jain & Others which were engaged in providing accommodation entries. ii) On the facts and in circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition made by the Assessing Officer on account of bogus purchases even though in the case of Mayank Di....
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.... scrutiny in CASS by notice was issued u/s 143(2) of the Act on 29.08.2015. During the course of assessment proceedings, it was noticed that assessee has made transactions with the entities of Bhanwarlal Jain Group in which case a search and seizure action was carried out by the Investigation Wing, Mumbai on 03.10.2013. It was found that there are namesake dummy directors / partners / proprietors / brokers etc. who were being actually managed by Shri Bhanwarlal Jain & others. This group concerns were actively involved in providing non-genuine purchase bills and also unsecured loan accommodation entries to various interested parties. Shri Bhanwarlal Jain in his statement recorded u/s 132(4) of the Act stated that he managed and controls the ....
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....he facts and circumstances of the case and same was restricted to 6% of the bogus purchases. Aggrieved by the order of Ld.CIT(A) Revenue has filed present appeal before the Tribunal. 4. Before us, Ld.Sr-DR for the Revenue supported the order of AO. The Ld.Sr-DR stated that decision of Ld.CIT(A) does not appear to be convincing as the assessee has debited bogus purchases to suppress his profit and Ld.CIT(A) has totally failed to appreciate that the Revenue has already conducted extensive action in form of search u/s 132 of the Act in the case of assessee and its allies. Ld.Sr-DR for the revenue stated that order of AO may be confirmed. 5. On the other hand, Ld. AR for the assessee relied on the order of Ld.CIT(A). 6. We have heard t....
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....isputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ld CIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ld CIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the observation that the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld C....
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....ss Profit @ .78% and net Profit @ .02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs. 1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs. 4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/ material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the ld CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon'ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicab....