AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 543
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....: "a) On the facts and circumstances of the case and law the ld.CIT(A) has erred in deleting the addition of Rs. 9,64,13.991/- made on account of bogus purchases u/s 69A of the Act ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group entities which were engaged in providing accommodation entries. b) On the facts and circumstances of the case and law, the ld. CIT(A| has justified partly allowing the appeal of the assessee and restricting the addition to 6% of the Loud bogus purchases against the addition made by the AO at the rate of 100% of bogus purchases amounting 10 Rs. 9,64,13,991/- ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group entities which were engaged in providing accommodation entries. c) On the facts and circumstances of the case and law, the ld. CIT(A) is correct in not considering that the amount claimed as payment to hawala dealers was in effect suppression of profits by obtaining bogus purchase bills which was liable to be added to the income of the Assessee. d) Whether on the....
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....sessee did not file return of income. During the course of 148 proceedings, the Assessing Officer noted that a search and seizure action was carried out in the Shri Rajendra Jain Group on 03.10.2013 which proved that the said group, through a layer of benami transaction was engaged in providing accommodation entries to various parties in respect of bogus unsecured loans, bogus purchases etc. During the assessment, the Assessing Officer noted that the assessee had received accommodation entries of bogus sales during the impugned Financial Year from various entities. On further investigation, the Assessing Officer observed that the such entities were not found to be operating from the addresses mentioned and were bogus entities. The Assessing Officer noted that despite issuance of several notices of hearing, the Assessing Officer did not cause appearance before the Assessing Officer. Accordingly, the Assessing Officer added a sum of Rs. 9,64,13,991/- with respect to various bogus accommodation entries received by the assessee from the following concerns which are tabulated below for ready reference: Name of the Entry Provider Amount (Rs.) Group Avi Exports 2,09,42,955/....
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....o the assessee had followed ITAT order for earlier years and hence had restricted addition to Rs. 5% of the purchases. We note that in view of the above facts, in our considered view, Ld. CIT(A) has taken a consistent approach by following orders passed by his predecessor and as well as ITAT in which similar additions for other years were restricted to 5% of purchases. In view of the above facts, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 9. In the result, the appeal of the Department is dismissed. Now we shall take up Department's appeal in ITA No. 1068/Srt/2024 10. The Department taken the following grounds of appeal: "a) On the facts and circumstances of the case and law, the ld. CIT(A) has erred in deleting the penalty levied by the A.O. u/s 271(1)(c) of the I.T. Act, 1961 of Rs. 3,24,52,950/- without appreciating the fact that the assesses claimed bogus purchases in its Return of income in order to suppress taxable incme thereby making himself liable for penalty u/s 271(1)(c) of the Income-tax Act, 1961. b) Whether on the facts and circumstances of the case and law the ld. CIT(A) has erred in deleting the pena....
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....08-09, I had directed the AO to restrict the disallowance to 0% of the disputed purchases. This appeal is against the penalty imposed on the bogus purchases. Various courts have decided in their judgements that no penalty under section 271(1)(c) is leviable on estimated additions which is the case here. The ITAT Mumbai has in a judgement, summed up as: Heard both the sides and perused the materials on record. It is undisputed fact that impugned penalty was levied only on estimated addition. The Assessing Officer had made addition of entire bogus purchases, however, did not doubt the sales made against such purchases. We observe that the Tribunals in various decisions have held that where sales are not disputed, entire alleged bogus purchases cannot be disallowed and only the gross profit on the alleged purchases to be disallowed." "After taking into consideration the various decisions of the Tribunal that no penalty under section 271(1)(c) is leviable on estimated additions and also after taking into consideration the decision of Hon'ble Rajasthan High Court in the case of CIT vs Krishi Tyre Retreading & Rubber industries 360 ITR 580, the decision of ....