2024 (9) TMI 634

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.... 25,20,244/- being alleged bogus purchases. The assessee claims that the addition, if any, should be restricted to the margin of profit imbibed in the alleged purchases. 3. Briefly stated the facts of the case are that the assessee filed its return of income declaring income at Rs. 1,62,630/-. Subsequently, the AO received information from the DGIT (Inv.), Mumbai, that, a search action was carried out in the case of Shri Rajendra Jain, Shri Sanjay Choudhary, Shri Dharmichand Jain and their group concerns on 03/10/2013. During the search action, it was revealed that these persons were merely providing accommodation entries through various benami concerns operated and managed by them. The AO came to know that the assessee was one of the be....

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....ohommad Haji Adam & Co. reported in [2019] 103 taxmann.com 459 (Bombay), under identical situation, held as under:- "8. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department....

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....ons accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue." 9. In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order as to costs." 7. Considering the gross profit rate in the light of the decision of the Hon'ble Bombay High Court, we direct the AO to restrict the addition to 6.19% of Rs. 25,50,244/- i.e., addition to the extent of Rs. 1,57,860/- is confirmed. Assessee gets part relief. 8. In the result, appeal of the assessee is partly allowed. Order pronounced in the Court on 28th August, 2024 at Mumbai. ============= Document 1 Purchase/wat MDMONDS FRANCIAL YEAR: 201....