TaxTMI 
TaxTMI 
2024 (11) TMI 1266
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.....S.Soparkar for the respondent. 2. This Tax Appeal is filed under Section 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 28.06.2022 passed by the Income Tax Appellate Tribunal, Surat (for short 'the Tribunal') in ITA No.920/AHD/2017 for the Assessment Year 2013-2014 : - "1. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has justified in restricting the addition made by the AO from Rs. 8,64,04,012/- being 100% to 6% of the bogus purchase without appreciating the facts that the assessee had failed to prove the genuineness of the transaction made with the concerns which was identified as bogus enti....
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....re was to be added to income of Assessee. 5. Whether on the facts and circumstances of the case in law, the Hon ble tribunal is right in deleting the addition made by the AO on account of bogus purchase even though in the case of Mayank Diamonds Pvt Ltd. [2014(11) TMI 812], the Hon'ble High Court has directed to make addition at the rate of 5% of the total turnover." 3. Brief facts of the case are that: 3.1 The respondent-assessee is engaged the business of import, processing, export and trading of diamonds. The return of income for Assessment Year 2013-14 was filed on 30.09.2013 declaring total income at Rs. 2,53,33,000/-. 3.2 On the basis of the information received from the Investigation Wing, Mumbai in case of Shri....
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.... appeal of the Revenue wherein it was held that in respect of bogus purchases, the addition at the rate of 6% of bogus purchases is fair and reasonable. 4.2. Learned advocate Mr.Rudram Trivedi submitted that this Court has dismissed the Tax Appeal No.617 of 2022 in case of Pankaj K. Choudhary (Supra) wherein, similar questions of law raised by the Revenue. 5. Considering the above submissions, the relevant extract from the order of the Tribunal is reproduced herein below : "18. As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that ....
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.... impugned suppliers. From the Trading & P & L account and Audit report it can be seen that the GP rate shown by appellant is 1.85% oil sales. In such circumstances the disallowance of 100% of purchases cannot be justified. Also as held above, the appellant would nave indulged in above practice in order to get some benefit. And it is this benefit derived by the appellant that need to be taxed. What would be the magnitude of benefit derived by the appellant is the mute question. In the appellant's case, it is seen that GP rate shown is 0.78%". 5.1 The final view was expressed in para 10.10, "Following the above judicial pronouncements and views taken by Ld. CIT(A) & AOS in a few identical cases. In a couple of identical cases, where ....
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....- 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 applicable on the facts of the present case. We find that in Mayank Diamonds the Hon'ble High Court restricted the additions to 5% of GP. We have seen that....