2025 (5) TMI 1701

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...."the Act"] dated 29.07.2024 for the A.Y. 2010-11 wherein the Ld. CIT(A) confirmed the additions made by AO of Rs. 5,15,721/- being 4% of allegedly evaded VAT tax on the suspicious purchase u/s 69C of the Act. 2. The brief facts of the case are that, the assessee is an individual and engaged in the business of trading in plastic granules and lumps and other sources. The return of income for AY 2010-11 was filed on 20.09.2010 declaring total income of Rs. 2,60,117/-. The return was processed u/s 143(1) of the Act. Subsequently, an information was received from Sales Tax Department and DGIT(Inv.), Mumbai that some businessman had indulged in the acceptance of bogus purchase bills from the bogus hawala bill providers and assessee is one the ....

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....se as to why the purchases made from the aforesaid party should not be disallowed. However, the assessee has failed to prove the onus relied upon him by producing the register, stock register, etc. in support of the contention that sales invoices submitted are the same that were purchased from the hawala dealers. The AO found it not tenable and acceptable as the assessee failed to furnish any cogent evidence to substantiate his claim of purchases from aforesaid party. For these reasons, the AO concluded that the alleged purchases were bogus having been made from those parties which were not available and were not found existing at the addresses given by the assessee. Thus the same were bogus and non-genuine and these purchases made from the....

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..... 1004/2016 dated 11.02.2019), the addition in respect of bogus purchase is to be limited to the extent of bringing the gross profit rate on such purchases at the same rate as on other genuine purchases." The Ld. CIT(A) has reproduced the finding of the Hon'ble High Court in para no. 7.3.2 and disposed the issue in para no. 7.3.3 as under:- "7.3.3. I respectfully following the aforesaid Judgment of the Hon'ble High Court and in view of the facts of the case, I also find that Gross Profit for the genuine purchases was offered as 4.93% and same of suspicious purchases was offered as Rs. 4.99% and since Gross Profit at the similar rate has already been offered and taxed, no further addition is required to be made in this regard. H....

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....t conclusion that the assessee has failed to substantiate the creditworthiness and identity of the parties and genuineness of the transactions and has found the alleged purchase from those parties as bogus purchase. It is further submitted that the Ld. CIT(A) has rightly followed the settled law and confirmed the addition u/s 69C of the Act and submitted for dismissal of the appeal filed by the assessee. The Ld. DR further submitted that the Hon'ble Jurisdictional High Court in PCIT vs. Kanak Impex (India) Ltd. (2025) 172 taxmann.com 283 (Bom) ITA No. 791/2021 order dated March 3, 2025 was pleased to hold that on account of bogus purchases, the Assessing Officer was justified in making addition of entire amount of bogus purchases u/s 69C of....