TaxTMI 
TaxTMI 
2024 (1) TMI 1499
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....ons of law arising out of the judgment and order dated 05.04.2023 passed by the Income Tax Appellate Tribunal, Surat (for short 'the Tribunal') in ITA No.345/SRT/2022 for the Assessment Year 2011-2012:- "(i) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in estimating the addition in respect of bogus purchases @6% of such purchases as against disallowance made by the Assessing Officer @100% of such purchases amounting to Rs. 7,99,56,728/- ignoring the fact that these purchases are sham transactions fabricated through bogus concerns and entities which were engaged in providing accommodation entries and which was unearthed as a result of the action of VAT Department of Maharashtr....
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....in law, the order of the Hon'bel ITAT is perverse in observing that No such report of documents were provided to the Assessee without appreciating that the Assessing Officer duly followed the principle of natural justice by incorporating all the findings of the Maharashtra VAT Authority with regard to the action taken at accommodation entry providers in the show cause notice issued to the Assessee?" 3. Brief facts of the case are that: 3.1 The respondent-assessee is engaged in the business trading. The assessee filed return of income for Assessment Year 2011-12 on 28.09.2011 declaring total income at Rs. 3,36,70,590/-. 3.2 On the basis of the information received from DGIT(Inv.)-II, Mumbai that the assessee has obtained accommodati....
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.... CIT vs. Bholanath Poly Fab Private Limited reported in (2013) 40 taxmann.com 494 (Guj) wherein it was held that only profit element embedded in disputed purchased would be subject to tax. 4.1. Learned advocate Mr. Rudram Trivedi further 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: "24. As the issue is squarely covered by judgment of the Co-ordinate Bench in the case of Pankaj K. Chaudhary (supra) wherein Tribunal held that in respect of bogus purchases, the addition @ 6% of bogus purchases ....
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....e 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 cas....
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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 tha....