2024 (2) TMI 1586

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.... Income Tax Appellate Authority, Surat in ITA No.285/SRT/2019 for A.Y. 2013-14 with the following proposed substantial questions of law. (i) Whether, on the facts and in the circumstances of the case and in law, the Ld. Tribunal was justified in estimating the addition in respect of bogus purchases at the rate of 6% of such purchases as against disallowance made by the AO at the rate of 100% of such purchases amounting to Rs. 9,46,18,796/- ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Shri Pravin Kumar Jain Group companies which were engaged in providing accommodation entries? (ii) Whether, on the facts and in the circumstances of the case and in law, the Ld. Tribun....

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....xtent of 6% of Rs. 09,46,18,796/-. 2.3 As against this, the Revenue is before this Court by way of this appeal by raising the aforesaid substantial questions of law. 3. We have heard learned advocate Mr.Karan Sanghani for learned advocate Mrs.Kalpana Raval for the appellant-Revenue. 3.1 At the outset, learned advocate for the Revenue has fairly pointed out the judgment of the coordinate Bench of this Court in case of Principal Commissioner of Income Tax v. Pankaj K. Choudhary rendered in Tax Appeal No.617 of 2022 for partly allowing the appeal of the Revenue wherein it was held that in respect of bogus purchase, the addition at the rate of 6% of bogus purchases is fair and reasonable. 4. At this stage, it would be appropriate to....

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....profit element of profit embedded in such type of transactions can be added to the income of the assessee. The Id CIT(A) while restricting the addition to the extent of 5% referred various decision of Tribunal and Jurisdictional High Court. Before us, the Id CIT DR for the revenue vehemently argued that the disallowance restricted by the CIT(A) is very low and it should be at least be restricted to 25% of the disputed purchases. We have examined the facts of the case independently and find that the AO while making 100% disallowances of the disputed purchases solely relied on the report of the investigation wing. No independent investigation was carried out by the AO. No specific findings were given on the documentary evidences filed by the ....