“ bogus purchases ”

CIT v. Bholanath Poly Fab. Pvt. Ltd.

Additions for alleged bogus purchases should be restricted to the profit element, not the entire turnover. The profit element is often estimated at 12.5% of the purported bogus purchases.

355 ITR 290 · 2013 · High Court

712

Sanjay Oilcake Industries v. CIT

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.

316 ITR 274 · 2009 · High Court

460

Vijay Proteins Ltd. v. Asst. CIT

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.

58 ITD 428 · 1996 · ITAT

430

CIT v. Odeon Builders Pvt. ltd.

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.

418 ITR 315 · 2019 · Supreme Court

408

CIT v. Nikunj Exim Enterprises Pvt. Ltd.

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.

372 ITR 619 · 2015 · High Court

391

Nikunj Eximp Enterprises v. CIT

Transactions defying human probability cannot be applied to isolated purchases if sales are accepted as genuine, and purchases cannot be disallowed without considering the entire transaction and documentary evidence. Failure to produce parties in an assessment proceeding may not be fatal to the assessee.

216 Taxmann 171 · 2013 · High Court

325

54 Taxmann.com 108 · 2015 · High Court

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

279

ITA 5118/MUM/2018[2010-11]Status: DisposedITAT Mumbai29 Jan 2020AY 2010-11

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.

Judgments citing bogus purchases

Shri Maganlal M. Patel, Mumbai vs. ITO 22(1)(3), Navi Mumbai

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

Bench: Shri Saktijit Dey & Shri G. Manjunathamaganlal M.Patel Vs. Ito-27(2)(2) 4Th Floor, Tower No.6 502, New Vishwajyoti Apartment Railway Station Balaji Lane, Tilak Road Commercial Complex Op. Balaji Mandir, Vashi, Navi Mumbai Ghatkopar(E) Mumbai-400 703 Mumbai-400 077

Section 143(3)Section 147

appeal:- 1. Learned CIT(Appeals) erred in confirming profit @ 12.5% on the purchases effected from registered dealers and erred in treating the same as bogus purchase ignoring the detailed evidences brought on record & further erred in levying interest thereon and Ignoring the judicial precedents brought to his knowledge. 2. Learned ... DGIT, investigation, Mumbai, as per which, Sales Tax Authorities of Government of Maharashtra had taken actions against number of Hawala dealers, who had issued bogus purchase bills to various parties. As per list of beneficiaries, the assessee is one of the beneficiary, who had taken accommodation bills of bogus purchases

Acg Arts & Properties P.Ltd, Mumbai vs. DCIT Cen Cir 42, Mumbai

The appeal stands allowed for statistical purposes

ITA 2749/MUM/2014[2008-09]Status: DisposedITAT Mumbai29 Jan 2020AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 2749/Mum/2014 (िनधा"रण वष" / Assessment Year: 2008-09) Acg Arts & Properties Pvt. Ltd. Dcit-Central Circle-42 बनाम/ 1001, Dalamal House Aaykar Bhavan 10Th Floor, Nariman Point M.K.Road Vs. Mumbai – 400 021 Mumbai-400 020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacu-0615-L (अपीलाथ" /Appellant) (""थ" / Respondent) :

For Appellant: S/Shri J.D.Mistry & Madhur Aggarwal-For Respondent: Shri Harshad Vengurlekar-Ld. DR

Section 143(3)Section 153B

namely, M/s Reflection which is proprietorship concern of one of the directors, Ms. Kavita Singh. Investigations revealed that the said group indulged in accepting bogus purchase bills in respect of paintings from persons who were engaged in providing accommodation bills. The details of alleged bogus purchases as made

M/S. Gorur Infra Projects Pvt. Ltd., Pune vs. Joint Commissioner of Income-Tax, Pune

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

ITA 13/PUN/2016[2010-11]Status: DisposedITAT Pune28 Jan 2020AY 2010-11

Bench: Shri D. Karunakara Rao, Am & Shri S. S. Viswanethra Ravi, Jm आयकर अपील सं. / Ita No.13/Pun/2016 िनधा"रण वष" / Assessment Year : 2010-11 M/S. Gorur Infra Projects Pvt. Ltd., C/O. D.Y. Pandit, Advocate, 1187/10, Krupa, Shivaji Nagar, Pune-411005. .......अपीलाथ" / Appellant Pan : Aadcg5519J बनाम / V/S. Jt. Cit, Panvel Range, ……""यथ" / Respondent Panvel. Assessee By : Shri Deepa Khare Revenue By : Shri S. P. Walimbe सुनवाई क" तारीख / Date Of Hearing : 22.01.2020 घोषणा क" तारीख / Date Of Pronouncement : 28.01.2020 आदेश / Order Per D. Karunakara Rao, Am: This Appeal Filed By The Assessee Is Against The Order Of The Cit(A)-2, Thane Dated 28.10.2015 For The Assessment Year 2010-11. 2. The Grounds Raised By The Assessee Are As Under :- “1. The Appellate Order Passed By Ld. Cit (A) 2, Thane Is Contrary To Facts Of The Case & Against The Provisions Of Law & Passed With Preconceive Notion & Best Of Conjectures & Surmises & Therefore Requires To Be Quashed. 2.A). The Jt. Commissioner Of Income Tax Panvel Renge Disallowed The Payment Amounting To Rs. 2,29,96,335/- Made To Four Suppliers Of Pipes On The Ground That Assessee Could Not Substantiate Its Claim By Furnishing Stock Register & Material Inward Details & Relied Upon The Information Received From The Sales Tax Department. Infact The Joint Commissioner Of Income Tax Panvel Rang Did Not Ask For Providing Such Details Of Stock Registers Or Material Inward Details During Assessment Proceedings.

For Appellant: Shri Deepa KhareFor Respondent: Shri S. P. Walimbe

Section 80I

course of appeal hearing.” 3. The assessee also raised the following additional ground :- “Assuming for the sake of argument but without admitting the alleged bogus purchases would be added back to the infrastructural profit of the assessee which is exempt u/s. 80IA(4)(b) read with clause ... preference to the original grounds raised by the assessee in the present appeal. Mentioning that the Assessing Officer made addition on account of bogus purchases amounting to Rs.2,29,96,335/- for the assessment year 2010-11, ld. Counsel mentioned that the assessee is entitled to claim of deduction

ITO 27 (1)(4), Mumbai vs. Shri. Eknath Shankar Pednekar, Mumbai

In the result, the appeal is partly allowed

ITA 437/MUM/2019[2010-11]Status: DisposedITAT Mumbai28 Jan 2020AY 2010-11

Bench: Shri R.C. Sharma: A.Y : 2010-11

For Appellant: NoneFor Respondent: Shri Anoop Hiwase

Section 143(3)Section 145

appeal filed by the revenue is against the order of CIT(A) for the A.Y.2010-11 in the matter of addition upheld on account of bogus purchases, order passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961. 2. In this appeal revenue is aggrieved for upholding addition in respect ... bogus purchases to extent of 12.5% as against 100% made by the AO. 3. I have gone through the orders of the authorities below and found that AO has made addition of 100% in respect of purchases found to be bogus. 2 Shri Eknath Shankar Pednekar 4. By the impugned

ITO 25(3)(1), Mumbai vs. Madhuben Prakash Parekh, Mumbai

In the result appeal of the revenue is dismissed

ITA 350/MUM/2019[2010-11]Status: DisposedITAT Mumbai28 Jan 2020AY 2010-11

Bench: Shri Vikas Awasthy & Shri S. Rifaur Rahmanआयकर अपील सं./I.T.A. No. 350/Mum/2019 ("नधा"रण वष" / Assessment Years : 2010-11

For Appellant: Shri K. Bhoopathi, DRFor Respondent: Shri Rushabh Mehta, AR

ITA 324/MUM/2019[2011-12]Status: DisposedITAT Mumbai28 Jan 2020AY 2011-12

Mehta appearing on behalf of the assessee submitted that in the course of reassessment proceedings, the A.O held that the assessee has indulged in bogus purchases to the tune of Rs. 92,01,585/- and made additions of entire such bogus purchases. The assessee carried the issue in appeal before ... vide order dated 10.01.2018 restricted the addition on account of bogus purchases to 6.5% of such alleged bogus purchases. The Revenue filed appeal before the Tribunal in ITA No. 2079/Mum/2018 assailing finding of the CIT(A) in restricting the addition to 6.5% of the alleged bogus purchases. The Tribunal dismissed

ITO Ward 3(3), Thane vs. M/S S.D Process Equipment, Thane

In the result, the appeal filed by the Revenue is dismissed

Bench: Shri Vikas Awasthy () & Shri N.K. Pradhan () Assessment Year: 2011-12

For Appellant: NoneFor Respondent: Mr. R. Bhoopathi, DR

ITA 322/MUM/2019[2010-11]Status: DisposedITAT Mumbai28 Jan 2020AY 2010-11

learned CIT(A) erred in deleting the penalty by not appreciating the fact that the assessee failed to prove the genuineness of the alleged bogus purchases from the Hawala parties during the course of assessment as well as penalty proceedings. 2. On facts and circumstances of the case ... basis of information received from the Sales Tax Department, Govt. of Maharashtra and further findings, the AO observed that the assessee had obtained bogus purchase bills of Rs. 19,96,355/- from 7 entry providers. In the assessment order dated 24.03.2015, the AO estimated the profit @ 12.5% on such disputed

ITO Ward 3(3), Thane vs. M/S Simmy Electromech, Thane

In the result, the appeal filed by the Revenue is dismissed

Bench: Shri Vikas Awasthy () & Shri N.K. Pradhan () Assessment Year: 2011-12

For Appellant: NoneFor Respondent: Mr. R. Bhoopathi, DR

ITA 1671/PUN/2019[2010-11]Status: DisposedITAT Pune27 Jan 2020AY 2010-11

declaring total income at Rs.2,16,600/-. On receipt of information from the Sales Tax Department, Government of Maharashtra that the assessee had obtained bogus purchase bills by accommodation entries from 3 entry providers, the Assessing Officer (AO) made a disallowance of the profit embedded in such purchases amounting ... Before us, the Ld. DR submits that the estimation @ 20% has been made by the AO not on normal purchases, but on bogus purchases and therefore, the penalty of Rs.31,570/- be affirmed. 6. We have heard the Ld. DR and perused the relevant materials on record. In the instant

Income-Tax Officer, Ward - 1 (4), Nashik vs. Jitendra Ravindra Malpure, Nashik

In the result, the appeal of the Revenue is dismissed

Bench: Shri Anil Chaturvedi

For Appellant: NoneFor Respondent: Shri Bharat Deoraj Shegaonkar

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

Learned CIT(A)-1, Nashik was justified in deleting the penalty of Rs.1,48,803/- for A.Y. 2010-11 on account of alleged bogus purchases from Hawala dealers/parties? 2. Whether on the facts and in the circumstances of the case, the Learned CIT(A)-1, Nashik was justified in deleting

ITO.26(1)(1), Mumbai vs. Shri. Akbarali Jivabhai Momoin, Mumbai

In the result, appeal of the revenue is dismissed

ITA 447/MUM/2019[2011-12]Status: DisposedITAT Mumbai27 Jan 2020AY 2011-12

Bench: Shri R.C. Sharma: A.Y : 2011-12

For Appellant: Shri Vimal PunmiyaFor Respondent: Shri Anoop Hiwase

Section 133(6)Section 143(3)Section 145

appeal filed by the revenue is against the order of CIT(A) for the A.Y.2011-12 in the matter of addition upheld on account of bogus purchases, order passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961. 2. In this appeal revenue is aggrieved for upholding addition ... extent of 12.5% in respect of alleged bogus purchases, which was made by the AO at 28%. 3. I had gone through the orders of the authorities below and considered the contention of the ld. AR Shri Vimal Punmiya and ld. DR Shri Anoop Hiwase. From the record, I found

ITO-26(3)(5), Mumbai vs. Shri. Wajidali M H Shaikh, Mumbai

In the result, appeal of the revenue is dismissed

ITA 443/MUM/2019[2010-11]Status: DisposedITAT Mumbai27 Jan 2020AY 2010-11

Bench: Shri R.C. Sharma: A.Y : 2010-11

For Appellant: NoneFor Respondent: Shri Anoop Hiwase

ITA 440/MUM/2019[2010-11]Status: DisposedITAT Mumbai27 Jan 2020AY 2010-11

have gone through the orders of the authorities below and found that AO had made 100% addition in respect of alleged bogus purchases which was restricted by CIT(A) to the extent of 12.5% after applying judicial pronouncements in case of Bholanath Poly ... After considering all the facts, the CIT(A) has upheld the addition of 12.5% in respect of profit element embedded in such alleged bogus purchases. Detailed finding has been given by CIT(A) at para 7.4 to 7.7, which has not been controverted by 2 Shri Wajidali M.H. Shaikh bringing

ITO 6(3)(1), Mumbai vs. Ideen Furniture Pvt. Ltd, Mumbai

In the result, appeal of the revenue is dismissed

Bench: Shri R.C. Sharma: A.Y : 2010-11

For Appellant: Shri Mahesh SabooFor Respondent: Shri Anoop Hiwase

ITA 434/MUM/2019[2010-11]Status: DisposedITAT Mumbai27 Jan 2020AY 2010-11

order passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961. 2. Revenue is aggrieved for upholding the addition on account of bogus purchases to the extent of 12.5% in place of 100% made by the AO. 3. I have gone through the orders of the authorities below ... found that the AO reopened assessment on finding that assessee has made bogus purchases of Rs.14,463/-. Accordingly, he added entire amount in assessee’s income. 2 M/s. Ideen Furniture Pvt. Ltd 4. By the impugned order, CIT(A) has restricted the addition to the extent

ITO 8(2)(2), Mumbai vs. M/S Smit Exports Pvt. Ltd, Mumbai

In the result, appeal of the revenue is dismissed

Bench: Shri R.C. Sharma: A.Y : 2010-11

For Appellant: Shri H.B. GandhiFor Respondent: Shri Anoop Hiwase

ITA 380/MUM/2019[2010-11]Status: DisposedITAT Mumbai27 Jan 2020AY 2010-11

u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961. 2. In this appeal revenue is aggrieved for restricting the addition on account of bogus purchases to the extent of 12.5%. 3. I had gone through the orders of the authorities below and found that addition made on account ... bogus purchases was restricted by CIT(A) to the extent of 12.5% after threadbare dealing with the observation and finding of the AO. The CIT(A) has applied the judicial pronouncements as laid down by Gujarat High Court in case of Simit P Sheth 356 ITR 451 and after considering

ITO 17(2)(4), Mumbai vs. M/S N N Trading Corporation, Mumbai

In the result, both the appeals of the revenue are dismissed

Bench: Shri R.C.Sharma

ITA 375/MUM/2019[2011-12]Status: DisposedITAT Mumbai27 Jan 2020AY 2011-12

these appeals, the revenue is aggrieved by the order of the ld. CIT(A) for reducing addition to the extent of 5.75% of alleged bogus purchases, which was made by the A.O. @ 12.5%. 3. I have gone through the orders of the authorities below and found that ... Trading Corpn. with regard to purchases without delivery of goods. Accordingly, the A.O. reopened the assessment and after estimating profit at 12.5% of alleged bogus purchases, made addition. 4. By the impugned order, the ld. CIT(A) after considering various judicial pronouncements and the facts of the case, directed

ITO 27(1)(2), Mumbai vs. Bhagwandas P. Bhanushali, Mumbai

In the result, appeal of the revenue is dismissed

Bench: Shri R.C.Sharmai.T.O.-27(1)(2), Vs. Shri Bhagwandas P. Room No. 407, 4Th Floor, Bhanushali, Tower No. 6, Vashi D-36, Himalaya Society, Railway Station Complex, N.P. Road, Ghatkopar (W), Vashi, Navi Mumbai- Mumbai-400084. 400703. Pan/Gir No.Accpb 7658 K (Appellant) .. (Respondent) Revenue By Shri Akhtar H Ansari (Dr) Assessee By None Date Of Hearing 23/01/2020 Date Of Pronouncement 27/01/2020

Section 143(3)Section 145

this appeal, the revenue is aggrieved by the action of the ld. CIT(A) for restricting the addition on account of bogus purchases to the extent of 12.5% which was made by the A.O. at 100% of alleged bogus purchases. While reducing the addition to the extent ... appellant company was asked to submit the details of purported purchases made and to show cause why the same should not be disallowed as bogus purchases. The appellant filed reply stating that purchases were made from regular parties supported by proper bills and the accounting entries and the payments were

ITO-26(2)(4), Mumbai vs. Pankaj Agarwal, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

ITA 6/MUM/2019[2010-11]Status: DisposedITAT Mumbai23 Jan 2020AY 2010-11

Bench: Shri Shamim Yahya, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.06/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2010-11) Ito-26(2)(4) बिधम/ Pankaj Agarwal Room No.511, 5Th Floor, C- A/102, Twin Star Chs, Vs. Shristhi Complex, Saki 11, Bandra Kurla Complex, Vihar Road, Powai, Bandra (E), Mumbai- Mumbai-400072. 400051. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Abmpa0824F (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Revenue By: Shri Akhtar Ali Ansari (Dr) Assessee By: None सुनवाई की तारीख / Date Of Hearing: 09/01/2020 घोषणा की तारीख /Date Of Pronouncement: 23/01/2020 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 24.07.2018 Passed By The Commissioner Of Income Tax (Appeals) -38, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2010- 11. 2. The Revenue Has Raised The Following Grounds: -

For Appellant: NoneFor Respondent: Shri Akhtar Ali Ansari (DR)

Section 143(1)Section 143(2)Section 147Section 148Section 40A(3)

circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the disallowance to 15% of the total amount of bogus purchase transaction instead of 25% of the total amount of bogus purchase made by the AO." 2. "Whether on the facts and in the circumstances ... considering that the A.Y.2010-11 addition was made on the basis of information received from DIT(lnv.) and Sales Tax Department, Maharashtra with regard to bogus purchase made by the assessee from dealers without supply of actual goods." 3. "Whether on the facts and in the circumstances of the case

ITO, W-1(5), Thane vs. Hemant Manohar Takle, Thane

In the result, all these three appeals of the revenue are dismissed

ITA 358/MUM/2019[2011-12]Status: DisposedITAT Mumbai23 Jan 2020AY 2011-12

Bench: Shri R.C.Sharma

ITA 357/MUM/2019[2010-11]Status: DisposedITAT Mumbai23 Jan 2020AY 2010-11

grievance of the revenue relate to ld. CIT(A)’s action for deleting the penalty imposed with respect to disallowance made on account of bogus purchases. In the A.Y. 2009-10, the A.O. has levied penalty of Rs. 30,810/-, in the A.Y. 2010-11 the A.O. has levied penalty ... record. In the appeal order of the quantum appeal, the then CIT(A) had restricted the addition to the extent of 25% of bogus purchases. Hence the addition to income has been sustained on estimation basis. 6. The Supreme Court has recently reiterated the law in case of Dilip

ITO, W-1(5), Thane vs. Hemant Manohar Takle, Thane

In the result, all these three appeals of the revenue are dismissed

Bench: Shri R.C.Sharma

ITA 356/MUM/2019[2009-10]Status: DisposedITAT Mumbai23 Jan 2020AY 2009-10

ITO, W-1(5), Thane vs. Hemant Manohar Takle, Thane

In the result, all these three appeals of the revenue are dismissed

Bench: Shri R.C.Sharma

ITA 337/MUM/2019[2010-11]Status: DisposedITAT Mumbai23 Jan 2020AY 2010-11

Vikas Madanmohanlal Arora, Mumbai vs. ITO 28(3)(4), Mumbai

In the result, appeal of the assessee is allowed in part, in terms

Bench: Shri R.C.Sharmavikas Madanmohanlal Vs. I.T.O. Arora, Ward 28(3)(4), 3Rd Floor, Tower No. 6, 28-1003, Seawoods Estate, Nri Complex, Nerul, Navi Vashi, Navi Mumbai- Mumbai-400706. 400703. Pan/Gir No.Aekpa 7854 C (Appellant) .. (Respondent)