TaxTMI 
TaxTMI 
2026 (9) TMI 502
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....(1A) of the Maharashtra Value Added Tax Act. 2022 and therefore such expenses are not allowed as per express provision u/s 37 of the Act. 2. Whether in the facts and circumstances of the case and in law, the Learned CITIA) erred in overlooking the undisputed facts and material evidence on record, including credible information and investigation findings from the Directorate of Income Tax (Investigation), Mumbai, revealing that the suppliers were paper companies engaged in providing accommodation entries. 3. Whether in the facts and circumstances of the case and in law, the Learned CIT(A) failed to appreciate that the reassessment proceedings were rightly initiated under Section 147 of the Income Tax Act on the basis of specific and reliable information obtained during search and survey operations, and the reopening was validly done with sufficient reason to believe. 4. Whether in the facts and circumstances of the case and in law, the Learned CITIA) erred in accepting the mere documentary evidence filled by the assessee without considering the broader context of the transactions, including the nature of the suppliers, non-verification of the goods movemen....
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....f the ITAT was upheld by Hon'ble Gujrat High Court and also by the Hon'ble Supreme Court. 10. The tax effect involved in this case is Rs. 51,66,460/, which is below the prescribed limit mentioned in the CBDT's Circular F.No.279/Misc 142/2007-ITJ(P1) amended vide No. 09/2024 dated 17.09.2024. However, the appeal is being filed before the Hon'ble ITAT, as this case also falls under one of the exceptions specified in paragraph 3.1(h) of the of CBDT's Circular No. 05/2024 Dated. 15.03.2024, wherein it is stated that in cases involving "Organized Tax Evasion", including cases of accommodation entry of bogus purchases, in such cases decision to file an appeal/SLP shall be taken on merit without regard to the tax effect and the monetary limit. 11. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 3. The grounds of cross objections by the assessee are as under: "1. The Ld CIT(A) has erred in not holding that the reopening of the assessment was merely on the basis of the borrowed satisfaction and, hence, illegal. 2: The Ld CIT(A) ought to have held that the Assessing Officer has fa....
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....s. The CIT(A) further observed that the AO had not brought any material on record to establish that the purchase consideration was returned to the assessee in cash or that the assessee had received any benefit against the alleged bogus purchases. Since the corresponding sales were accepted by the AO, the CIT(A) held that the entire purchase amount could not be treated as unexplained/bogus. Accordingly, the CIT(A) directed the AO to delete the entire addition of Rs. 1,67,19,933/- made on account of alleged bogus purchases and allowed the appeal. 6. Aggrieved by the order of CIT(A), the revenue has filed appeal before the Tribunal. The assessee has filed cross objection on the rejection of the ground on validity of reopening u/s 147 of the Act. The CIT-DR supported the order of the AO and submitted that the CIT(A) erred in deleting the addition of Rs. 1,67,19,933/- made on account of bogus purchases. He submitted that the AO, on the basis of the Investigation Wing's findings in the case of Gautam Bhanwarlal Jain group, had established that the supplier concerns were accommodation entry providers and that the assessee had failed to prove the genuineness of the purchases. It was....
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....les have not been disputed by the AO. Therefore, as contended by the appellant in its alternative submission before the CIT(A), only the profit element embedded in the impugned purchase transactions could be added and not the entire purchase amount. We find that there are number of decisions in cases of bogus purchases, where the Hon'ble High Court and Tribunal have sustained addition to the extent of 12.5% to 15% of the bogus purchases. In case of PCIT vs. Ramelex Pvt. Ltd., Income-tax Appeal No.14 of 2022 dated 13.10.2025, the Hon'ble jurisdictional Bombay High Court has upheld addition @15% in respect of bogus purchases. The Hon'ble Gujarat High Court in case of CIT vs. Simit Seth, 356 ITR 451 (Guj.) has also upheld addition @15% of the impugned purchases. We also find that the co-ordinate Bench of Mumbai Tribunal has restricted the addition to 15% of the bogus purchase in the case of Amarshi Harakchand Gada vs. ITO in ITA No.675/Mum/2026 (AY 2011-12) dated 25.05.2026. Therefore, we direct the AO to restrict the addition to 15% of the bogus purchases of Rs. 1,67,19,933/-. Accordingly, addition of Rs. 25,07,999/- is confirmed and the remaining addition is deleted. Accordingly, th....
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.... addition could not have been deleted addition merely on basis of lawyer's argument that aforesaid admission was recorded under mistaken belief of fact and law. In the case of Kishore Kumar B (2014) 52 Taxmann.com 449 (Madras) /(2015) 229 Taxman 614 (Madras) / (2015) 273 CTR 468 (Madras). Where assessee himself stated about his undisclosed income in sworn statement recorded during search, addition could be made on basis of admission without scrutinizing documents. SLP against the decision is dismissed by Hon'ble Supreme Court as reported in (2015) 62 Taxmann.com 215 (SC)/(2015) 234 Taxman 771(SC). In the case of SURENDRA M KHANDAR (2010) 321 ITR 254 (BOMBAY) / (2009) 224CTR 409 (BOMBAY) Held that Where zerox copy of document seized from assessee was not denied the same showed advancement of certain sums to one "C" and two signatories of said document were also not denied by assessee and as document was seized from assessee's control, presumption under section 132(4A) and 292C was clearly applicable." 12. We have both parties and perused the materials on record. We have also deliberated on the decisions relied upon by the parties. W....