“bogus purchases”

DisallowancesSection 69CSection 69C9,532 judgments

The decision most relied on for bogus purchases is CIT v. Bholanath Poly Fab. Pvt. Ltd. (355 ITR 290), cited in 712 judgments on BharatTax.

Leading authorities on bogus purchases

CIT v. Bholanath Poly Fab. Pvt. Ltd.

355 ITR 290 · 2013 · High Court

712

citing judgments

If an assessee makes purchases from bogus parties, but the underlying goods are genuinely acquired and sold, only the profit margin embedded in such purchases, and not the entire value of the bogus purchases, should be added to the assessee's income.

Sanjay Oilcake Industries v. CIT

316 ITR 274 · 2009 · High Court

460

citing judgments

In cases of alleged bogus or unverifiable purchases, rather than disallowing the entire purchase value, a reasonable profit element or a proportionate percentage of the purchases should be added back to the assessee's income.

Vijay Proteins Ltd. v. Asst. CIT

58 ITD 428 · 1996 · ITAT

430

citing judgments

Where purchases are found to be non-genuine or fictitious, a reasonable disallowance of 25% of such purchases or the peak credit, whichever is higher, can be made. This is applied to address unexplained expenditure under Section 69C when actual goods are likely procured from the grey market.

CIT v. Odeon Builders Pvt. ltd.

418 ITR 315 · 2019 · Supreme Court

408

citing judgments

Income tax additions cannot be sustained merely on the basis of uncorroborated statements or allegations. The Revenue must bring on record sufficient material and allow the assessee to produce evidence to prove such additions.

Nikunj Eximp Enterprises v. CIT

216 Taxmann 171 · 2013 · High Court

325

citing judgments

Purchases may be treated as genuine even if the purchase parties are untraceable or not available for verification, as long as there is no specific evidence from the parties themselves denying the transactions or proving them to be bogus.

CIT v. Shyam R. Pawar

54 Taxmann.com 108 · 2015 · High Court

279

citing judgments

Transactions involving the purchase and sale of shares cannot be considered bogus where the assessee provides documentary evidence, unless the revenue brings substantial evidence on record to reject such proof. This principle is consistently applied in cases concerning claims of bogus long-term capital gains arising from penny stock transactions.

CIT v. Simit P. Seth

38 Taxmann.com 385 · 2013 · High Court

278

citing judgments

When an assessee obtains accommodation bills for purchases but the corresponding sales are genuine, the addition to income is limited to the gross profit margin embedded in such purchases. This principle acknowledges that the underlying sales were real, but profit was suppressed through bogus invoices.

CIT v. Vijay M. Mistry Construction Ltd.

355 ITR 498 · 2013 · High Court

252

citing judgments

In cases of alleged bogus or hawala purchases where the existence of transactions is not entirely denied, only the profit element embedded in such purchases, and not the entire purchase price, can be added to the assessee's income. The focus is on determining a reasonable profit percentage for such additions.

Judgments citing bogus purchases

Ashok Kumar Sharma, New Delhi vs. ITO Ward - 24(4), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 7078/DEL/2019[2011-12]Status: DisposedITAT Delhi20 Apr 2023AY 2011-12

Bench: Shri Kul Bharat & Shri M Balaganesh[Assessment Year : 2011-12] Ashok Kumar Sharma, Vs Ito, 4306, Sec-B-5 & 6, Ward-24(4), New Delhi. Vasant Kunj, New Delhi-110070. Pan-Akzps3781M Appellant Respondent Appellant By None Respondent By Shri Kanv Bali, Sr. Dr Date Of Hearing 13.04.2023 Date Of Pronouncement 20.04.2023

Section 143(3)Section 68

confirming addition of Rs. 14,99,987/- by considering the purchases made by the appellant during the year under consideration as bogus purchase, merely because the confirmation furnished before the AO was not on the letter head of the supplier. Both CIT(A) and AO had ignored the fact that ... impugned additions. 8. Ground No.2 raised by the assessee is against the confirming the addition of INR 14,99,987/- made on account of bogus purchases. 9. We have heard Ld. Authorized Representatives of the parties and perused the material available on record. We find that lower authority has given

Assistant Commissioner of Income Tax, Circle 1(1), Raipur vs. Mesers Tirupati Balaji Food Private Limited, Tilda

In the result, appeal of the revenue in ITA No

ITA 13/RPR/2019[2015-16]Status: DisposedITAT Raipur20 Apr 2023AY 2015-16

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.202/Rpr/2018 "नधा"रण वष" / Assessment Year : 2014-15 The Assistant Commissioner Of Income Tax-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. Tirupati Balaji Foods Pvt. Ltd., Tilda-Neora, Raipur (C.G.) Pan : Aacct7476L ……""यथ" / Respondent आयकर अपील सं. / Ita No.13/Rpr/2019 "नधा"रण वष" / Assessment Year : 2015-16 The Assistant Commissioner Of Income Tax-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. Tirupati Balaji Foods Pvt. Ltd., Tilda-Neora, Raipur (C.G.) Pan : Aacct7476L ……""यथ" / Respondent

For Appellant: Shri R.B Doshi, CAFor Respondent: Smt. Ila M. Parmar, CIT- DR

Section 131Section 143(3)Section 250(4)Section 69C

total addition of Rs.5,59,67,956/- ignoring the fact that these purchases are nothing but bogus purchases managed through bogus bills?" 2. "Whether on points of law and on fact & circumstances of the case, the Ld.CIT(A) was justified in ignoring the affirmation on oath in statements recorded ... Rs.62,75,000/- Rs.4,87,500/- 11/01/2014 Raipur 11. M/s. Shri Sanjeevni Agro Rs.2,77,84,350/- Rs.4,87,500/- 19/12/2013 Products, Abhanpur Total Bogus purchase Rs.22,38,71,825/- Rs.53,22,500/- The A.O considering the fact that the aforesaid tainted parties from whom the assessee company had claimed

Assistant Commissioner of Income Tax, Circle 1(1), Raipur vs. Mesers Tirupati Balaji Food Private Limited, Tilda

In the result, appeal of the revenue in ITA No

ITA 202/RPR/2018[2014-15]Status: DisposedITAT Raipur20 Apr 2023AY 2014-15

For Appellant: Shri R.B Doshi, CAFor Respondent: Smt. Ila M. Parmar, CIT- DR

Section 131Section 143(3)Section 250(4)Section 69C

Rohan Tooling Solutions India Pvt. Ltd., Gurgoan vs. ITO, Ward- 21(3), New Delhi

In the result, the appeal is partly allowed

ITA 6583/DEL/2018[2010-11]Status: DisposedITAT Delhi19 Apr 2023AY 2010-11

Bench: Shri Saktijit Deyassessment Year: 2010-11

Section 131Section 133(6)Section 147Section 254(2)

appellant submits that sales amount and quantitative details of opening stock, purchases, sales, closing stock are duly accepted by A.O in such situation entire bogus purchases of Rs.30,00,000/- would not be held as undisclosed income rather profit margin embedded in such purchases would be subject to tax having ... Rs.10,78,300. Subsequently, the Assessing Officer received information from the investigation wing indicating that the assessee has availed accommodation entry by way of bogus purchases worth Rs.30,00,000 from M/s. Global Trading Corporation. Based on such information, the Assessing Officer reopened the assessment under Section

Biju Abraham Meppurathu, Mumbai vs. ITO, Ward 1(1), Thane

In the result, appeal filed by the assessee is partly allowed

ITA 430/MUM/2023[2010-11]Status: DisposedITAT Mumbai18 Apr 2023AY 2010-11

Bench: Shri B.R. Baskaran (Am) & Shri Rahul Chaudhary (Jm)

Section 148

assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition relating to the alleged bogus purchases. 2. We have heard the parties and perused the record. The assessee is engaged in the business of trading in computer and also undertakes computer related services. Based ... information received from the sales tax department of Maharashtra Government that certain dealers are providing bogus purchase bills without actually supplying the material, the Assessing Officer reopened the assessment of the year under consideration by issuing notice under section 148 of the Act, on noticing that the assessee has purchased

Apex Diamonds, Mumbai vs. ITO-19(1)(1), Mumbai

In the result, appeal filed by the assessee is treated as allowed

ITA 421/MUM/2023[2010-2011]Status: DisposedITAT Mumbai18 Apr 2023AY 2010-2011

Bench: Shri B.R. Baskaran (Am) & Shri Rahul Chaudhary (Jm)

Section 148

assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition of gross profit on alleged bogus purchases. 3. We heard the parties and perused the record. The assessee is trader and exporter of diamonds and other precious/non-precious stones. The Income Tax Department received information that ... extent of GP rate declared on other genuine purchases. He submitted that in the instant case the GP rate declared on alleged bogus purchases was more than the GP rate declared on other genuine purchases. Accordingly, he submitted that no addition is warranted in the facts and circumstances

Prime Star, Surat vs. ACIT, CC-1(3), Mumbai

In the result, appeal of the assessee is allowed to the above extent for statistical purposes

ITA 381/MUM/2022[2015-16]Status: DisposedITAT Mumbai17 Apr 2023AY 2015-16

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Prime Star 3-M, Ambika Darshan The Acit Moti Kadiya Sheri Central Circle-1(3) Sayedpura, Vs. Pratishtha Bhavan Surat, Gujarat-395003 Mumbai

For Appellant: Shri Suchek Anchaliya, ARFor Respondent: Shri Satyaprakash Singh, DR

Section 143(3)Section 147Section 251(2)

case and in law the Ld. CIT (A) erred in confirming the addition of alleged commission income arising out of alleged bogus unsecured loans, bogus purchases and bogus sales amounting to Rs. 18,95,951/- on protective basis without appreciating the fact that the same amount has been substantively added ... erred in confirming the addition of alleged commission income arising out of alleged bogus unsecured loans, bogus sales and bogus purchases and also confirming the addition of gross profit, on estimation basis, of a percentage of the total turnover, without appreciating the fact that both such additions cannot co- exist

Mother Exports, Surat vs. ACIT, CC 1(3), Mumbai

In the result, appeal of the assessee is allowed to the above extent for statistical purposes

ITA 358/MUM/2022[2015-16]Status: DisposedITAT Mumbai17 Apr 2023AY 2015-16

For Appellant: Shri Suchek Anchaliya, ARFor Respondent: Shri Satyaprakash Singh, DR

Section 143(3)Section 147Section 251(2)

Miles Stone, Gujarat vs. ACIT CC-1(3), Mumbai

In the result, appeal of the assessee is allowed to the above extent for statistical purposes

ITA 353/MUM/2022[2015-16]Status: DisposedITAT Mumbai17 Apr 2023AY 2015-16

For Appellant: Shri Suchek Anchaliya, ARFor Respondent: Shri Satyaprakash Singh, DR

Section 143(3)Section 147Section 251(2)

Madhur Gems Pvt. Ltd, Mumbai vs. ACIT CC-1(3), Mumbai

In the result, appeal of the assessee is allowed to the above extent for statistical purposes

ITA 347/MUM/2022[2015-16]Status: DisposedITAT Mumbai17 Apr 2023AY 2015-16

For Appellant: Shri Suchek Anchaliya, ARFor Respondent: Shri Satyaprakash Singh, DR

Section 143(3)Section 147Section 251(2)

Rose Gems Pvt. Ltd, Mumbai vs. ACIT CC 1(3), Mumbai

In the result, appeal of the assessee is allowed to the above extent for statistical purposes

ITA 343/MUM/2022[2015-16]Status: DisposedITAT Mumbai17 Apr 2023AY 2015-16

For Appellant: Shri Suchek Anchaliya, ARFor Respondent: Shri Satyaprakash Singh, DR

Section 143(3)Section 147Section 251(2)

Shanti Parboiling Industries, Raipur vs. Assistant Commissioner of Income Tax, Circle-2(1), Raipur

In the result, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations

ITA 99/RPR/2021[2016-17]Status: DisposedITAT Raipur17 Apr 2023AY 2016-17

Bench: Shri Ravish Sood & Shri G D Padmahshaliआयकर अपील सं. / Ita No.99/Rpr/2021 "नधा"रण वष" / Assessment Year : 2016-17

For Appellant: NoneFor Respondent: Shri Piyush Tripathi, Sr. DR

Section 131Section 133ASection 143(3)Section 145(3)

jurisdiction either in law or on facts with the Ld. CIT(A) to sustain the addition of 48,16,049/- on ground of alleged bogus purchase made from four parties, as same has already been fully and sufficiently disclosed by the Appellant under the Income disclosure scheme 2016 and thereon ... declaration made by the Appellant under income disclosure scheme 2016, wherein the Appellant had categorically declared the undisclosed income in form of alleged bogus purchase @ 8.83% to income and has already made corresponding and applicable payment of tax (along with interest) on such undisclosed income under income disclosure scheme

ACIT, Circle-3(2), Surat vs. M/S. Rajlaxmi Infra, Surat

In the result, this ground of appeal is dismissed

ITA 163/SRT/2020[2013-14]Status: DisposedITAT Surat17 Apr 2023AY 2013-14

Bench: Shri Pawan Singh & Dr Arjun Lal Sainiआ.अ.सं./Ita No.163/Srt/2020 (Ay 2013-14) (Hearing In Physical Court) Assistant Commissioner Of M/S Rajlaxmi Infra Income-Tax, Circle-3(2), Room 64, Rajlaxmi Height, Vs No.410, Aayakar Bhawan, Singanpore Cosway Road, Majura Gate, Opp. Shradhhadeep Soc, Surat-395001 Surat-395004 Pan No. Aaofr 1095 C ""थ" /Respondent अपीलाथ"/Appellant

Section 133(6)Section 143(3)Section 254(1)

justified in deleting the addition of Rs.58,00,745/- made by the AO on account of bogus purchases, by observing that the same are genuine, without considering the facts brought out, even by enquiries conducted us/ 133(6) of the Act, and further failure on the part of the assessee ... assessee in deleting the addition of unsecured loan and sustained the addition to the extent of Rs.18.00 lakh. The addition on account of bogus purchase of Rs.58.00 lakh (approx.) was entirely deleted. 7. The Ld. CIT(A) while deleting the substantial part addition of unsecured loan, examined the fact

ITO - 28(3)(3), Mumbai vs. Shri Surekha Anil Lokre, Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 3238/MUM/2019[2010-11]Status: DisposedITAT Mumbai13 Apr 2023AY 2010-11

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: NoneFor Respondent: Shri Satyaprakash Singh

Section 133(6)Section 143(1)Section 147Section 148Section 250Section 254(1)

circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to restrict the addition of bogus purchases to 12.5% as against addition of 25% made by the Assessing Officer on account bogus purchases without appreciating the fact that parties from whom these purchases ... case of N.K.Proteins Ltd Vs DCIT (769 OF 2017), wherein the Hon'ble Supreme Court has confirmed 100% addition made on account of bogus purchases? (3) The appellant prays that the order of Ld. CIT (A) on the above grounds be reversed and that of the Assessing officer be restored

M/S Winner Impex, Mumbai vs. ACIT-19(3), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 330/MUM/2023[2009-10]Status: DisposedITAT Mumbai11 Apr 2023AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Blem/S. Winner Impex V. Acit – 19(3) G-1, Jaisingh Business Center Mumbai Sahar Road, Parsiwada Andheri (E), Mumbai - 400099 Pan: Aaafw3731A (Appellant) (Respondent)

Section 133(6)Section 143(1)Section 147

assessee. 5. Aggrieved assessee preferred appeal before us raising following grounds in its appeal: - A) disallowance of ₹.15,16,615/- being 100% alleged bogus purchases is unjustified and liable to be deleted 1. The Ld. CIT (Appeals) (NFAC) has erred in confirming the addition made by AO of Rs.15 ... being 100% disallowance of alleged bogus purchases made from M/s. Khushi Impex without appreciating that the Appellant has genuinely purchases goods from the said party and all the supporting documentary evidence were duly filed including quantitative details and stock register and hence, the addition made of Rs.15,16,615/- being

ITO, Ward-3(2), Kalyan vs. Shri Sai Works, Thane

In the result, appeal of the Revenue is dismissed

ITA 2151/MUM/2022[2010-11]Status: DisposedITAT Mumbai11 Apr 2023AY 2010-11

Bench: Shri Amit Shukla, Jm & Shri Prashant Maharishi, Am आयकरअपीलसं./ I.T.A. No.2151/Mum/2022 (निर्धारणवर्ा / Assessment Year: 2010-11) Ito, Ward-3(2). Shri Sai Works Thane. 2Nd Floor, Rani Mansion, 02, Ground Floor, Radhashri बिधम/ Murbad Road, Kalyan Society, Savarkar Road, Vs. Maharashtra- 421301 Dombivli (E) Thane Maharashtra- 421201 स्थायीलेखासं./जीआइआरसं./Pan No Abbfs0588D (अपीलाथी/Appellant) (प्रत्यथी / Respondent) :

For Appellant: NoneFor Respondent: Shri Ram K. Kedia, Sr. AR

Section 143(3)Section 147Section 271(1)(c)

opened again u/s 147 on the basis of information received from Sales Tax department Mumbai, that some parties were involved in providing bogus purchase bills and assessee has also shown purchases from them. Thus, it was noted that assessee was also one of the beneficiary who has availed accommodation entry ... I.T.A. No. 2151/Mum/2022 SHRI SAI WORKS LL been deleted in the cases where addition has been made on adhoc estimation of GP rate on bogus purchases. 7. After hearing both the parties, and on perusal of the impugned order, it is seen that in the quantum proceedings the additions which

Sawailal Surtaram Bhatti, Mumbai vs. Income Tax Officer, 20(3)(2), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 3191/MUM/2022[2010-2011]Status: DisposedITAT Mumbai10 Apr 2023AY 2010-2011

Bench: Shri Aby T. Varkey, Jm & Shri Om Prakash Kant, Am आयकर अपील सं/I.T.A. No.3191/Mum/2022 (निर्धारणवर्ा/Assessment Year: 2010-11) Sawailal Surtaram Bhatti बिधम Income Tax Officer, 20 161, 4Th Floor, Panchshil (3) (2) Vs. Niwas, 5Th Kamathipura, Matru Mandir, Parel Mumbai-400 008 Mumbai-400 007

For Appellant: Shri Dhaval ShahFor Respondent: Shri Anil K. Das

Section 143(1)Section 144

thereafter, proceeded to observe in the impugned order about the merits of the addition made by AO [ad-hoc addition of 12.5% on bogus purchases to the tune of Rs.3,57,38,866/- based on the report of the Maharashtra Sales Tax Department] which was passed u/s 144 r.w.s ... processed u/s 143(1) of the Act. Subsequently, the AO received information from the DGIT (Investigation)-Mumbai, that the assessee was engaged in bogus purchase activity of taking accommodation entry from hawala operators which information was based on report of Maharashtra Sales Tax Department that twelve (12) persons named

Zile Singh Kashyap, New Delhi vs. ITO Ward - 47(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 431/DEL/2020[2011-12]Status: DisposedITAT Delhi06 Apr 2023AY 2011-12

Bench: Sh. Anil Chaturvedi & Sh. Yogesh Kumar Uszile Singh Kashyap Vs. Ito C/O. Gourav Sachdeva & Ward – 47(1) Co. Ca, A-8, Kewal Park New Delhi Extn., South Extn., New Delhi-110 033 Pan No. Ahfpk 1369 Q (Appellant) (Respondent) Assessee By -None- Revenue By Ms. Sangeeta Yadav, Sr. D.R. Date Of Hearing: 28.03.2023 Date Of Pronouncement: 06.04.2023

Section 142(1)Section 147Section 148Section 250Section 271Section 271(1)(b)Section 271(1)(c)

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. YOGESH

Assistant Commissioner of Income Tax, Cir.1(1)(1), Surat vs. Enviro Control Pvt. Ltd., Surat

In the result, all the grounds of appeal raised by the revenue are dismissed

ITA 345/SRT/2022[2011-12]Status: DisposedITAT Surat05 Apr 2023AY 2011-12

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Virtual Hearing) A.C.I.T., Enviro Control Pvt. Ltd., Circle-1(1)(1), Enviro House, Opp. Bank Of Vs. Surat. Maharashtra, Ghod Dod Road, Surat-395007. Pan No. Aaace 8700 C Appellant/ Assessee Respondent/ Revenue

Section 143(2)Section 143(3)Section 148Section 254(1)

facts and circumstances of case and in law, the Ld. CIT(A) has erred in restricting the addition at 6% of bogus purchases as against disallowance made by the AO at the rate of 100% of bogus purchases amounting to Rs.7,99,56,728/- ignoring the facts that these purchases ... doubted. Account confirmation justified that the purchases are genuine. The assessee also relied all various case laws wherein some percentage on account of similar bogus purchases were restricted or confirmed instead of disallowances of entire amount of purchases. 4. The Assessing Officer after considering the submissions of assessee, accepted that

Ragmet Engineering Private Limited, Mumbai vs. ACIT Circle 8(1)(1), Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 493/MUM/2023[2016-17]Status: DisposedITAT Mumbai04 Apr 2023AY 2016-17

Bench: Shri Br Baskaran & Shir Pavan Kumar Gadaleragmetengineeringpvtltd., Vs. Ito, 8(1)(1) 8/101, Siddivinayak Co- Aayakar Bhavan, Op Industrial Estate, Maharishi Karve Jogini Industrial Complex, Road Next To Anti V.N Purav Mumbai-400020. Marg, Sion, Chunnabhatti Mumbai.-400022. Pan/Gir No. : Aaacr3069F Appellant .. Respondent Appellant By : Ms.Rashmi Vyas.Ar Respondent By : Ms.Naina K. Kumar.Dr Date Of Hearing 20.04.2023 Date Of Pronouncement 21.04.2023 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of National Faceless Appeal Centre (Nfac), Delhi / Cit(A) Passed U/S 250 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Ms.Rashmi Vyas.ARFor Respondent: Ms.Naina K. Kumar.DR

Section 142(1)Section 143(1)Section 143(3)Section 234ASection 250Section 40

Mumbai. there are various reasons for the discrepancies between the assessee ledger and creditors ledger and they cannot be considered as the bogus purchases alone. The appellant prays that the addition made on these account of Rs. 21,17,834/- may please be deleted Ground No. 2 On the facts ... received from the creditors These creditors did not reply because they were aggrieved by the assessee however the same cannot be treated as the bogus purchases The appellant prays that the same may please be deleted. Ground No. 3 Without prejudice to the above and in alternative