TaxTMI 
TaxTMI 
2026 (3) TMI 127
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....the case and in law, Ld. CIT(A) has erred in restricting the addition to the extent of 8% as against the 25% addition made by the AO, on account of bogus purchases amounting to Rs.1,73,63,923/- made with M/s. Metalix Metal Corpn. M/s. Mercury Metal Corpn. M/s. Goodluck Metals, M/s. Mahalaxmi Steel(India), all are identified as bogus entities by the Maharashtra State Sales Tax Department under MVAT 2002, involved in practice of providing accommodation entries for bogus purchases?" 2. "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in restricting the addition to the extent of 8% as against the 25% addition on Rs. 1,73,63,923/- by ignoring the fact that action of the Assessing officer was based on ....
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....wable as per express provision u/s. 37 of the Act ?" 5. Whether on the facts and circumstances of the case and in law, Ld. CITIA) has erred in restricting the addition to the extent of 8% without appreciating the decision of the Hon'ble. Supreme Court in the case of M/s. N. K. Proteins Ltd. Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated. 16.01.2017, wherein the Hon'bLd. Court has held that once a findings of act has been given that entire purchases shown on the basis of fictitious invoices and debited in the P & L account are established as bogus, then restricting the addition to a curtained percentage goes against the principle of section 68 and 69C of the Income Tax Act, 1961 ?" 6. "Whether on the facts and circums....
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....spective parties were found non genuine and the decision of the ITAT was upheld by Hon'bLd. Gujarat High Court and thereafter also by the Hon'bld. Supreme Court?" 9. The tax effect involved in this case is Rs.13,02,294/-, which is below the prescribed limit as mentioned in the CBDT's Circular F.No.279/Misc. 142/2007-ITJ(Pt) amended vide No. 09/2024 dated. 17.09.2024. However, the appeal is being fild.d before the Hon'bLd. ITAT, as this case also falls under one of the exceptions specified in paragraph 3.1(h) of the of the CBDT's Circular No.05/2024 Dated. 15.03.2024, wherein it is stated that in cases involving "Organized Tax Evasion", in such cases the decision to fild. appeal/SLP shall be taken on merit withou....
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....25% of such alleged non- genuine purchases. This appeal has been preferred by the assessee against the order of the Assessing Officer (AO) making an addition of 25% of the purchases treating them as non-genuine. The learned AO, based on the information received from the Sales Tax Department, concluded that the assessee had made purchases from certain dealers providing accommodation entries without actual supply of goods. Consequently, the AO made an addition of Rs. 43,40,981/-, being 25% of the alleged bogus purchases. Subsequently, on appeal before the CIT(A), the appellate authority has restricted the addition to 12.5% of such non-genuine Purchased. 7.1. Against the same, the "SMC" Bench, Mumbai. In the decision pronounced, the H....
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....hould be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. Taking the totality of facts and circumstances, keeping in view the nature of business of the assessee i.e. trader in Ferrous and non-Ferrous Metals, it would be justified if the profit element embedded in those purchases are estimated at 8%. Accordingly, I direct the Assessing Officer to estimate the profit element from the non-genuine purchases at 8% and restrict the disallowance of purchases to 8% and compute the income accordingly. 7. In the result, appeal of the assessee is partly allowed." 7.1.1. In the above said order, the Hon&#....
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....)172 Taxmann.com 283 (Bombay) Dated. 03.03.2025, warrant reconsideration of the issue, and that the entire bogus purchases ought to be disallowed in view of the principles emerging from M/s. N. K. Proteins Vs. Dy. CIT (2016) 292 CTR (Guj.) 354, Dated 16.01.2017. 3.2 The Ld. Counsel for the assessee, on the other hand, submitted that the Ld. CIT(A) merely followed the specific direction of the Tribunal in the assessee's own case and could not have taken a contrary view. 4. We have heard the rival submissions and perused the record. The Revenue's primary contention is that the legal landscape has shifted significantly following the recent decision of the Hon'ble Bombay High Court in Pr. CIT v. Kanak Impex (India) Ltd (supra). In tha....