TaxTMI 
TaxTMI 
2025 (11) TMI 2062
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....rt "the Act") against the order dated 16.05.2024 passed by the Income Tax Appellate Tribunal, Surat (For Short "the Tribunal") in ITA No. 878/SRT/2023 for the Assessment Year 2007-08 and 2008-09 respectively. Since the facts are identical, Tax Appeal No. 1058 of 2024 for Assessment Year 2007-08 is taken as a lead matter. The appellant - Revenue has raised the following substantial questions of law:- "(a) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is justified in partly allowing the appeal of the assessee and restricting addition @ 6% of the bogus purchases against the decision of the Ld. CIT (Appeals) in confirming the addition made by the Assessing Officer at the rate of 100% of bogus purchases....
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....cutta High Court in the case of PCIT v. Premlata Tekriwal (143 taxmann.com 173) involving similar issue of purchase of bogus concern to suppress profits wherein the court held that "since it was established that expenditure was unexplained/bogus, entire amount of bogus expenditure was to be added to income of assessee? * the ratio of judgment of Hon'ble Apex Court on the issue of unexplained expenditure (bogus purchase) in the case of N.K. Proteins v. Dy. CIT [2017] 84 taxmann.com 195/250 Taxman 22 (SC) wherein, the SLP filed by the assessee has been dismissed by the Hon'ble Apex Court? (e) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is justified in restricting the addition to 6% of the ....
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.... validity of reassessment proceedings as well as on the merits of the case. The CIT (Appeals) upheld the addition made on account of bogus purchases. 3.5. Being aggrieved, the assessee preferred an appeal before the Tribunal. The Tribunal by impugned order dated 16.05.2024 for the Assessment Years 2007-08 and 2008-09 in ITA No. 878 and 879/SRT/2023, has partly allowed the appeal of the assessee and restricted the disallowance to 6% of the bogus purchases against the addition made by the Assessing Officer of 100% of the bogus purchases. The Tribunal has relied on its decision rendered in the case of Pankaj K. Chaudhary in ITA 1379/Ahd/2017 for Assessment Year 2007-08. 4. This Court finds that in several matters arising out of transacti....
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....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 cases, where the GP shown by the appellants is more than 5%, I have confirmed the disallowa....
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....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 that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turn....