TaxTMI 
TaxTMI 
2024 (10) TMI 105
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....n 260A of the Income Tax Act, 1961 (for short, "the Act") raising following substantial questions of law arising out of the judgment and order dated 1st April 2024 passed by the Income Tax Appellate Tribunal, Surat (for short, "the Tribunal") in ITA No.43/SRT/2024 for the Assessment Year 2011-12: "(i) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has justified in dismissing the appeal of the Revenue against the decision of the Ld CIT(A) in restricting the addition made by the AO at the rate of 100% of bogus purchases amounting to Rs. 173,89,14,095/- to 6% of the bogus purchases, ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Bhanwarlal Jain G....
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.... of bogus concern to suppress profits wherein the court held that since it was established that expenditure was unexplained/bogus, entire amount of bogus expenditure was to be added to income of Assessee? • the ratio of judgement of Hon'ble Apex Court on the issue of unexplained expenditure (bogus purchase) in the case of N.K. Proteins v. Dy. CIT [2017] 84 taxmann.com 195/250 Taxman 22 (SC) wherein, the SLP filed by the assessee has been dismissed by the Hon'ble Apex Court? (v) Whether on the facts and circumstance of the case and in law, the Hon'ble ITAT is justified in dismissing the appeal of the revenue wherein the AO has transaction made 100% addition of bogus amounting to Rs. 173,89,14,095/- made by t....
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....ransactions made with Bhanwarlal Jain Group. [3.5] Accordingly, the assessment order was passed on 26th March 2022 by the Assessing Officer under Section 144 read with Section 263 of the Act by disallowing the entire purchases of Rs. 1,73,89,14,095/- and penalty proceedings were initiated. [3.6] Being aggrieved, the assessee preferred an appeal before the CIT (Appeals), Surat, who, vide order dated 21st November 2023 partly allowed the appeal of the assessee restricting the addition to 6% of the bogus purchases. [3.7] Feeling aggrieved, the Revenue preferred an appeal before the Tribunal. The Tribunal, by the impugned order dated 1st April 2022 partly allowed the appeal of the Revenue and restricted the disallowance at 6% of bogus ....
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....[6] This Court in case of Pankaj K. Choudhary (Supra) while dismissing the Tax Appeal No.617 of 2022 has held as under: "5. The Assessing Officer noticed the contentions of the assessee that confirmation, purchase bills, bank statement, stock register, copy of ITR were already filed. The Assessing Officer was, however, of the view that transactions were bogus and merely that it routed through the banking channel, was not sufficient to conclude that they were the genuine transactions. The contention of the assessee that he had not dealt with the Bhanvarlal Jain group was also negatived. The appellate Commissioner took the view that disallowance was required to be sustained at 12.5% of the purchase. The Assessing Officer was directed....
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....appeal." 5.2 The disallowance at 100% was made in the assessment order for the year under consideration to the tune of Rs. 4,34,00,343/-, which was reduced to 12.5% at Rs. 54,25,040/-. Thereafter, the issue was dealt with by the appellate Tribunal. The appellate Tribunal endorsed to the view taken by the appellate Commissioner. It was observed that Assessing Officer failed to consider the evidence furnished by the assessee. 5.3 Considering the facts and relevant aspect, the Income Tax Appellate Tribunal partially allowed the appeal of the assessee to further reduce the disallowance at 6%. In so concluding, the Tribunal observed in paragraph No. 21 as under, ".......during the financial year under consideration the....
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....present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed." 6. The view taken and the conclusion arrived at by the appellant Tribunal are based on material before it and after analysing the facts and figure available before it. When the Tribunal has thought it fit to reduce the disallowance at 6% from 12.5%, the Tribunal had before it the facts which were duly analysed by it. No interference is called for in the said conclusion and findings of the Tribunal in the present appeal by this cour....