TaxTMI 
TaxTMI 
2026 (8) TMI 1655
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....n 26.09.2012 declaring total income of Rs. 38,54,199/-. Information was obtained that the assessee was involved in the transaction amounting to Rs. 45,90,000/- with a bogus party i.e. M/s. Gauri Traders, Gwalior during the financial year 2011-12. After verification of the return it was noticed that the assessee has offered income from business to the tune of Rs. 38,54,199/-. The Assessing Officer, therefore, after recording reasons, reopened the assessment as per the provisions of section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Thereafter, notice u/s 148 was issued and served on the assessee in response to which the assessee filed its return of income declaring total income of Rs. 38,54,199/-. 3. During th....
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....hat the said party and the respective transactions with the said party are bogus. 5. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. He noted that the Assistant Director of Income Tax (Investigation), Gwalior has made a conventional enquiry in this case. On receipt of information received that huge transaction has been done through RTGS / transfer from various firms and most of the funds were subsequently withdrawn in cash and the said party was not found, therefore, he held that the assessee has made bogus transaction with M/s. Gauri Traders, Prop. Lakhmee Chand. Relying on the decision of Hon'ble Gujarat High Court in the case of DCIT vs. N.K. Industries reported in 72 taxmann.com 289 (Guj)....
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....d the genuineness of the transaction rests solely on the assessee. Mere production of "paper trails" like invoices and bank payments is insufficient when the supplier is found to be non-existent or a mere provider of accommodation entries. The AO correctly relied on the decision of the Hon'ble Supreme Court in N.K. Industries Ltd., which upheld a 100% disallowance in cases of proven bogus purchases. While the appellant argued that the dismissal of the SLP does not create a merger of orders, the factual finding of "bogus purchases" remains undisturbed. The acceptance of sales by the AO does not automatically validate the source of purchases. When the alleged supplier is found to be non-traceable and non-existent, the documents produced a....
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....re also accepted and therefore, there was no reason to dispute the genuineness of the transaction of purchase of goods from M/s. Gauri Traders and hence, the addition made ought to have been deleted. 6. Without prejudice to the above grounds, the assessee submits that in case, it is held that the purchases made from M/s. Gauri Traders are held to be non-genuine, in that event, only a reasonable percentage of profit could be taxed and there is no reason to disallow the entire amount of the purchases made from M/s. Gauri Traders. 7. The appellant craves leave to add, alter, amend or delete any of the above ground of appeal. 8. The Ld. Counsel for the assessee referring to pages 21 to 29 of the paper book drew the attentio....
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....A Nos.1374 & 1392/PUN/2025 order dated 16.12.2025 for assessment years 2018-19 and 2019-20, he submitted that the Tribunal in the said decision after considering various decisions has held that the provisions of section 133A do not empower any ITO to examine any person on oath and the statement recorded u/s 133A has no evidentiary value and therefore, any admission made during such statement cannot be the basis for any addition. He accordingly submitted that no addition is called for in the instant case. 10. With prejudice to the above, he submitted that since the assessee has declared the GP rate of 9.6%, therefore, the same GP rate may be adopted for these purchases. 11. The Ld. DR on the other hand heavily relied on the orders of t....
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.... quantitative records and the sales made by the assessee have been accepted by the Assessing Officer. Therefore, the purchases cannot be treated as non-genuine / bogus. It is also his submission that since the sales have been accepted by the Assessing Officer and without purchases there cannot be sales, therefore, only the profit element embedded in such purchases may be added and the entire purchases cannot be disallowed. 13. We find merit in the alternate contention of the Ld. Counsel for the assessee that only the profit element embedded in such purchases may be added. It has been held in various decisions including the Hon'ble Jurisdictional High Court that only the profit element embedded in such purchases should be added instead of....