PRATAP N. RAJGOR,MUMBAI vs. ITO 19(2)(5), MUMBAI

I have heard both the learned Counsel and perused the records.

Up on careful consideration of the facts of the case, I find that overwhelming evidence have been referred by the authorities below that the impugned purchases are bogus. There is no evidence of the actual movement of the goods under dispute. In these circumstances learned Departmental Representative has referred to Hon’ble Gujarat High Court decision in the case of Tax Appeal No 240 of 2003 in the case of N K Industries vs Dy CIT , order dated 20.06.2016, wherein 100% of the bogus

. Shri Pratap N.Rajgor. purchases will held to be added in the hands of the assessee and tribunals restriction of the addition to 25% of the bogus purchases was set aside. The Special Leave Petition against this order along with others has been dismissed by the Hon’ble Apex Court vide order dated 16.1. 2017.

However, I find that this is an appeal by the assessee. Relief already given cannot be denied. The facts of the present case indicate that assessee has made purchase from the grey market. Making purchase through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In similar situation on the facts and circumstances of the case a disallowance of 12.5% of the bogus purchase has been considered to meet the end of justice in a number of cases at the Mumbai tribunal following Hon’ble Gujarat High Court decision in the case of Simit P Seth. Accordingly I hold that the disallowance in this case should be restricted to 12.5% of the bogus purchases. Hence I confirm the order of the learned CIT(A). The learned Counsel of the assessee fairly agreed to the above.

In the result, this appeal by the assessee stands dismissed.