“bogus purchases”

DisallowancesSection 69CSection 69C9,532 judgments

The decision most relied on for bogus purchases is CIT v. Simit P. Sheth (356 ITR 451), cited in 1,465 judgments on BharatTax.

Leading authorities on bogus purchases

CIT v. Simit P. Sheth

356 ITR 451 · 2013 · High Court

1,465

citing judgments

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.

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.

CIT v. Nikunj Exim Enterprises Pvt. Ltd.

372 ITR 619 · 2015 · High Court

391

citing judgments

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.

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.

Judgments citing bogus purchases

ITO, Ward- 3(4), Kalyan vs. Suresh G. Chavan, Mumbai

In the result, the appeals of Revenue for both the assessment years are dismissed

ITA 6867/MUM/2018[2011-12]Status: DisposedITAT Mumbai17 Dec 2019AY 2011-12

Bench: Shri Vikas Awasthy

For Appellant: NONEFor Respondent: Shri R.Bhoopathi, DR

AYs.2010-11 & 2011-12 were re-opened. In the re-assessment proceedings, the Assessing Officer (AO) observed that the assessee has indulged in obtaining bogus purchase bills from certain hawala dealers and thus made addition of Rs.10,03,260/- in AY.2010-11 and Rs.17,89,440/- in AY.2011-12 ... vide impugned order common for both the impugned assessment years, restricted the addition to 25% of the alleged bogus purchases i.e., Rs.2,50,815/- in AY.2010- 11. In AY.2011-12, the AO restricted the addition to difference in GP rate i.e., GP declared by the assessee in impugned assessment year

ITO, Ward- 3(4), Kalyan vs. Shri. Suresh G Chavan, Mumbai

In the result, the appeals of Revenue for both the assessment years are dismissed

ITA 6866/MUM/2018[2010-11]Status: DisposedITAT Mumbai17 Dec 2019AY 2010-11

Bench: Shri Vikas Awasthy

For Appellant: NONEFor Respondent: Shri R.Bhoopathi, DR

ITO -Ward- 3 (4), Kalyan vs. Satyanarayana C. Jakkul, Mumbai

In the result, the appeals of Revenue for both the assessment years are dismissed

ITA 6865/MUM/2018[2011-12]Status: DisposedITAT Mumbai17 Dec 2019AY 2011-12

Bench: Shri Vikas Awasthy

For Appellant: Shri Nimesh Chothani, ARFor Respondent: Shri R.Bhoopathi, DR

AYs.2010-11 & 2011-12 were re-opened. In re-assessment proceedings, the Assessing Officer (AO) observed that the assessee has indulged in obtaining bogus purchase bills from certain hawala dealers and thus made addition of Rs.7,55,588/- in AY.2010-11 and Rs.19,79,437/- in AY.2011-12. : 2 : ITA Nos. 6864 & 6865/Mum/2018 ... vide impugned order common for both the assessment years under appeal, restricted the addition to 25% of the alleged bogus purchases i.e., Rs.1,88,897/- in AY.2010-11 and Rs.4,94,859/- in AY.2011-12. Against the order of CIT(A), the Revenue is in appeal for both the assessment years

ITO -Ward- 3 (4), Kalyan vs. Satyanarayana C. Jakkul, Mumbai

In the result, the appeals of Revenue for both the assessment years are dismissed

ITA 6864/MUM/2018[2010-11]Status: DisposedITAT Mumbai17 Dec 2019AY 2010-11

Bench: Shri Vikas Awasthy

For Appellant: Shri Nimesh Chothani, ARFor Respondent: Shri R.Bhoopathi, DR

ITO, Ward- 3(4), Kalyan vs. Snehal Rasiklal Gandhi, Mumbai

In the result, the appeal of Revenue is dismissed

ITA 6863/MUM/2018[2011-12]Status: DisposedITAT Mumbai17 Dec 2019AY 2011-12

Bench: Shri Vikas Awasthyassessment Year : 2011-12 Smt. Snehal Rasiklal Gandhi, 10-B, 2Nd Floor, Gaondevi Vs. The Income Tax Officer, Prasad Manpada Road, Ward-3(4), Pandurang Wadi, Kalyan Dombivli (E) [Pan : Ailpg1478M] (Appellant) (Respondent)

For Appellant: Shri D.C.Saboo, ARFor Respondent: Shri R.Bhoopathi, DR

assessee for the AY.2011-12 was re-opened. In re-assessment proceedings, the Assessing Officer (AO) held that the assessee has indulged in obtaining bogus purchase bills from certain hawala dealers : 2 : aggregating to Rs.4,40,054/- and thus made an addition of Rs.4,40,054/-. Aggrieved against the assessment order ... goods originating from suppliers to the godown of the assessee. The Ld.DR prayed for modifying the order of CIT(A) and confirming the entire bogus purchases as ‘addition’. 5. Per contra, Shri D.C.Saboo, appearing on behalf of the assessee, vehemently defended the impugned order and prayed for dismissing the appeal

Gajanan Builders, Mumbai vs. ITO 31(1)(5), Mumbai

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

ITA 6156/MUM/2018[2011-12]Status: DisposedITAT Mumbai17 Dec 2019AY 2011-12

Bench: Shri Rajesh Kumar, Hon. & Shri Amarjit Singh, Hon.M/S. Gajanan Builders, Vs. Ito-31(1)(5), Office No. 20, Patel Industrial Room No. 307, C-13, 3Rd Floor, Bck, Bandra Estate, Opp. Veena Dalwai Industrial Estate, Navpada (E) Mumbai. Road, Jogeshwari (W), Mumbai.

For Appellant: Shri Kiran Mehta, FCA &For Respondent: Shri V. Vinod Kumar, Sr.DR

Section 133(6)Section 143(1)

addition to the tune of Rs. 10,72,944/- is based on the peak theory as against Rs. 30,01,930/- disallowance of bogus purchases made by the AO. The addition confirmed under this ground by CIT(A) comes to 35.75% of the total purchases. 3. Facts of the case ... Mohommad Haji Adam & Co. ITA No. 1004 of 2016 and others vide order dated 11.2.2019, the percentage should be applied to assess the bogus purchases after deducting the gross profit rate of the assessee. 7. However, on the other hand, ld. DR relied on the orders decision of the Coordinate

M/S.Nelco Steel India, Mumbai vs. Income Tax Officer 19(3)(4), Mumbai

The appeal of the assessee is allowed

ITA 4499/MUM/2018[2009-10]Status: DisposedITAT Mumbai17 Dec 2019AY 2009-10

Bench: Shri C.N. Prasad & Shri Rajesh Kumarassessment Year: 2009-10

For Appellant: NoneFor Respondent: Ms. Kavita P. Kaushik, D.R

Section 143(1)Section 147Section 148

assessee is against the confirmation of order of AO by Ld. CIT(A) upholding the addition made of Rs.11,13,225/- on account of bogus purchases. 4. The facts in brief are that the assessee filed return of income on 29.07.2009 declaring income of Rs.7,61,270/- which was processed ... reopened under section 147 of the Act by issuing notice under section 148 after the AO received information from DGIT that assessee has made bogus purchases from three parties aggregating to Rs.89,05,804/-. During the course of assessment proceedings, the assessee was required by the AO to file various

M/S.Krishna Sales & Marketing, Mumbai vs. Income Tax Officer-30(2)(4), Mumbai

In the result, the appeal of assessee is allowed

ITA 2510/MUM/2018[2009-10]Status: DisposedITAT Mumbai17 Dec 2019AY 2009-10

Bench: Shri Rajesh Kumar & Shri Amarjit Singhआयकर अपील सं/ I.Ta Nos. 2510 & 2511/Mum/2018 (िनधा"रण वष" / / / / Assessment Years:2009-10 & 2010-11 िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" M/S.Krishna Sales & Marketing, Income Tax Officer-30(2)(4), 801,Business Classic, 8Th Floor, Mumbai. Vs. Chincholi Bunder Road, Off.S.V.Road,Malad(West), Mumbai. 400 064. Pan: Aaifk 2739 C (Appellant) (Respondent) अपीलाथ" ओर से/ Appellant By : Shri S.M.Bandi, A.R ""यथ" क" ओर से/Respondent By: Smt.Jothilakshmi Nayak, D.R सुनवाई क" तारीख / Date Of Hearing : 21.11.2019 घोषणा क" तारीख /Date Of Pronouncement : 17.12.2019 आदेश / O R D E R Per Rajesh Kumarboth These Of Appeals Of The Assessee Are Directed Against The Common Order Of Ld.Cit(A)-41

For Appellant: Shri S.M.Bandi, A.RFor Respondent: Smt.Jothilakshmi Nayak, D.R

Section 131Section 132Section 143(3)Section 147Section 148

assessee have availed bogus loan entries from entities engaged in the business of providing accommodation entries in the form of bogus unsecured loans, bogus purchases and bogus capital gains etc which are related to or connected with Shri Bhanwarlal Jain and his Group. The said facts came to light during ... validity of re-opening is concerned, it is found that the reason for reopening was provided by the AO wherein bogus purchases made by the assessee as per ITA Nos.2510,2511/Mum/2018/Mum/20 information from the office of the DGIT(Inv) has been mentioned. There was a search & seizure action

The Income Tax Officer, Ward-25(3)(2), Mumbai vs. Pallavi Vijen Jhaveri, Mumbai

ITA 5998/MUM/2017[2007-08]Status: DisposedITAT Mumbai17 Dec 2019AY 2007-08

Bench: Shri A.D. Jain & Shri Rajesh Kumarassessment Year: 2007-08

For Appellant: Shri Dharmesh Shah, A.RFor Respondent: Shri Amit Mittal, D.R

Section 143(3)Section 147Section 148Section 148(2)

Revenue has challenged the order of Ld. CIT(A) deleting the addition of Rs.2,14,31,226/- on account of bogus purchases and directing the AO to estimate the addition at 3% of the total bogus purchases whereas the assessee by way of cross examination has challenged jurisdiction

Ankeet Cottage Industries, Aurangabad vs. Income-Tax Officer, Ward - 1 (3), Aurangabad

In the result, the appeal of assessee is dismissed

ITA 573/PUN/2019[2011-12]Status: DisposedITAT Pune16 Dec 2019AY 2011-12

Bench: Shri Anil Chaturvedi & Shri S.S. Viswanethra Ravi

For Appellant: Shri S.N. PuranikFor Respondent: Shri S.P. Walimbe

Section 271(1)(c)

record. The contention of Shri S.N. Puranik, the ld. AR is that the AO recorded satisfaction that the assessee filed inaccurate particulars relating to bogus purchases and initiated proceedings u/s. 271(1)(c) for filing inaccurate particulars. The AO imposed penalty for concealment of income which is not maintainable ... said Hawala purchases from its books of accounts and also to explain as to why the said Hawala purchases should not be treated as bogus purchases. We note that it was categorically accepted that the said purchases were made through brokers in gray market and basing on which

M/S. B.M. Chapalkar & Sons, Nashik vs. Assistant Commissioner of Income-Tax

In the result, the appeal is allowed for statistical purposes

ITA 243/PUN/2015[2010-11]Status: DisposedITAT Pune16 Dec 2019AY 2010-11

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviिनधा"रण वष" / Assessment Year : 2010-11 M/S. B.M. Chapalkar & Sons, Vs. Acit, Circle-1, 26, Dehbanoo Complex, Nashik Nashik Pune Road, Nashik Road, Nashik 422 101 Pan : Aadfb5084C Appellant Respondent

Section 133(6)Section 133A

addition of Rs.35.65 lakh which was again made in similar circumstances. Though the factual position in respect of third addition of Rs.27.30 lakh towards bogus purchases is somewhat different in the factual panorama, but the ld. AR submitted that one more opportunity be granted to the assessee to put forth

Kirtikumar D. Shah, Mumbai vs. ACIT 19(2), Mumbai

In the result, both the appeals of the assessee are allowed in part

ITA 7200/MUM/2018[2013-14]Status: DisposedITAT Mumbai16 Dec 2019AY 2013-14

Bench: Shri R.C.Sharma, Am & Shri C.N. Prasad, Jm

Section 143(3)

Grievance of the assessee in both the years relate to reopening of assessment and estimation of gross profit on the alleged bogus purchases. 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in business of manufacturing, import, export and trading ... Benches of the Tribunal. Respective orders were placed on record. It was contended that when corresponding sale are accepted, the addition on account of bogus purchases should be confined to the difference between the GP declared in respect of bogus purchases as compared to the GP in normal purchases

Kirtikumar D. Shah, Mumbai vs. ACIT 19(2), Mumbai

In the result, both the appeals of the assessee are allowed in part

ITA 7198/MUM/2018[2011-12]Status: DisposedITAT Mumbai16 Dec 2019AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri C.N. Prasad, Jm

Section 143(3)

ITO Ward- 3 (4), )Kalyan vs. Sunil Y. Bhiwandikar, Mumbai

In the result, the appeal of Revenue is dismissed

ITA 6862/MUM/2018[2009-10]Status: DisposedITAT Mumbai16 Dec 2019AY 2009-10

Bench: Shri Vikas Awasthyassessment Year : 2009-10 Sunil Y. Bhiwandikar, M/S.M.K.Bhiwandikar & Co., Vs. The Income Tax Officer, 103, Hariom Arcade, Ward-3(4), Opp: Kasturi Plaza, Kalyan Dombivli (E) [Pan : Adqpb5207P] (Appellant) (Respondent)

For Appellant: NONEFor Respondent: Shri R.Bhoopathi, DR

assessment of assessee for AY.2009-10 was re-opened. In re-assessment proceedings, the Assessing Officer (AO) held that the assessee has indulged in obtaining bogus purchase bills from the following hawala dealers: Name of the Hawala Dealer Amount of Bill Rs. Siddhivinayak Steels 78,333 Garima Steel Traders ... Jalaram Enterprises 2,84,856 Neptune Cor. 2,03,840 Total Rs. 10,80,033 The AO made addition of the entire aforesaid alleged bogus purchases. Aggrieved against the assessment order, the assessee filed an appeal before the CIT(A). 4. The CIT(A) vide impugned order, sustained addition

Income Tax Officer Ward 3(4), Kalyan vs. Smt Saroj Shailendra Bhagat, Mumbai

In the result, the appeal of assessee is partly allowed

ITA 6861/MUM/2018[2009-10]Status: DisposedITAT Mumbai16 Dec 2019AY 2009-10

Bench: Shri Vikas Awasthy

For Appellant: Shri Nimesh Chothani, ARFor Respondent: Shri R.Bhoopathi, DR

Section 143(3)Section 147

stainless steel goods. An information from Sales Tax Department, Government of Maharashtra was received by the Revenue that the assessee has indulged in obtaining bogus purchase bills from certain hawala operators. On the basis of : 2 : ITA Nos. 6674 & 6861/Mum/2018 the aforesaid information, the assessment for AY.2009-10 was re-opened ... dt.20-10-2014 passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’) held that the assessee had made bogus purchases from the following dealers: S.No Name of the dealer Amount Rs. 1 M/s.Trichipuram Trading Co 1,10,007 2 M/s.Niddhish Impex

Smt Saroj Shailendra Bhagat (Proprietor of M/S. Kamlarya Engineers & Fabricators), Mumbai vs. Income Tax Officer Ward 3(3), Kalyan

In the result, the appeal of assessee is partly allowed

ITA 6674/MUM/2018[2009-10]Status: DisposedITAT Mumbai16 Dec 2019AY 2009-10

Bench: Shri Vikas Awasthy

For Appellant: Shri Nimesh Chothani, ARFor Respondent: Shri R.Bhoopathi, DR

Section 143(3)Section 147

ITO 21 (1)(1), Mumbai vs. Abdul Rauf Bilal Ahmed, Mumbai

In the result, the appeal is partly allowed

ITA 6337/MUM/2018[2009-10]Status: DisposedITAT Mumbai16 Dec 2019AY 2009-10

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2009-10 Income Tax Officer-21(1)(1), Shri Abdul Rauf Bilal Ahmed, 1St Floor, Piramal Chambers, Vs. 401-A, Building House, Lalbaug, Mumbai-400012. 146, Vs Marg, Mahim (W) Mumbai-400018. Pan No. Aatpb3087H Appellant Respondent

For Appellant: NoneFor Respondent: Smt. Jothilakshmi Nayak, DR

Section 131Section 133(6)Section 142(1)Section 143(3)

facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on account of bogus purchases amounting to Rs.4,14,905/- without appreciating the fact that the addition made is on the basis of credible information received from the Maharashtra Sales Tax Department ... facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on account of bogus purchases amounting to Rs.4,14,905/- without appreciating the fact that the assesses has failed to discharge the onus of producing any corroborative evidence viz. details of delivery

ITO, Ward- 3 (3), Kalyan vs. Nimesh S. Desai, Mumbai

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

ITA 6184/MUM/2018[2009-10]Status: DisposedITAT Mumbai16 Dec 2019AY 2009-10

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2009-10 Income Tax Officer, Ward- Shri Nimesh S Desai, 3(3), Kalyan. Vs. C/O M/S Mahendra H Shah & Co., Cas, 12, Shivaji Fort Chs Ltd., N S Mankikar Marg, Sion (East), Mumbai-400022. Pan No. Aabpd8663R Appellant Respondent

For Appellant: Shri G.C. Lalka, ARFor Respondent: Smt. Jothilakshmi Nayak, Sr. DR

Section 143(3)Section 148

valve etc. On receipt of information from the Sales Tax Department, Government of Maharashtra Shri Nimesh S Desai 3 that the assessee had obtained bogus purchase bills amounting to Rs.6,10,365/- from nine parties, the Assessing Officer (AO) issued notice u/s 148 dated 05.04.2013 to re-open the assessment ... accounts of these parties were treated as assessee’s income on protective basis. On appeal, the ITAT restricted the addition on account of alleged bogus purchases at 25% i.e. Rs.73,23,322/- of the total purchases amounting to Rs.2,92,93,288/-. On further appeal, the Hon’ble High Court

Ratnagiri Stainless P. Ltd, Mumbai vs. ITO 5(3)(1), Mumbai

In the result, the appeals are partly allowed

ITA 6011/MUM/2018[2010-11]Status: DisposedITAT Mumbai16 Dec 2019AY 2010-11

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2010-11 & Assessment Year: 2011-12 M/S Ratnagiri Stainless Pvt. Ito 5(3)(1), Mumbai. Ltd., Office No. 8, 4Th Floor, Vs. 245/247, Alankar Cinema Building S V P Road, Mumbai-400004 Pan No. Aadcr2993P Appellant Respondent Assessee By : Mr. Vimal Punmiya, Ar Revenue By : Mrs. Jothilakshmi Nayak, Dr Date Of Hearing : 26/11/2019 Date Of Pronouncement: 16/12/2019

For Appellant: Mr. Vimal Punmiya, ARFor Respondent: Mrs. Jothilakshmi Nayak, DR

Section 133(6)Section 143Section 143(1)Section 143(3)Section 147Section 148Section 234A

Thereafter, on receipt of information from the Sales Tax Department, Government of Maharashtra that the assessee has obtained bogus purchase bills amounting to Rs.3,25,64,328/- from 22 parties, the AO re-opened the assessment by issuing notice u/s 148 dated 05.02.2015. In response to it, the assessee filed ... assessee for the reason that as per the investigation report of the Sales Tax Department, Government of Maharashtra, the assessee has obtained bogus purchase bills amounting to Rs.3,25,64,328/- ; the notices issued u/s 133(6) were returned un-served by the postal authorities ; the assessee failed to produce

ITO Ward 2(3)(7), Surat vs. Pankaj Kumar Jain, Surat

Accordingly, following the same, this ground is appeal of assessee is allowed

ITA 268/SRT/2019[2014-15]Status: DisposedITAT Surat13 Dec 2019AY 2014-15

Bench: Shri Sandeep Gosain & Shri O.P.Meenaआ.अ.सं./I.T.A No.189/Srt/2019 "नधा"रण वष"/Assessment Year: 2014-15 Pankaj Kanwarlal Jain(Huf), V The Income Tax Officer, Pro. Of M/S.Mahek Diamond, S Ward-2(3)(8), Surat. 302, Santok Diamond, . Somnath Mahadevni Sheri, Haripura, Surat. [Pan: Aahhp 8601 E] अपीलाथ" / Appellant ""यथ"/Respondent आ.अ.सं./I.T.A No.268/Srt/2019 "नधा"रण वष"/Assessment Year: 2014-15 The Income Tax Vs Pankaj Kanwarlal Jain(Huf), Officer, . Pro. Of M/S.Mahek Diamond, Ward-2(3)(8), Surat. 302, Santok Diamond, Somnath Mahadevni Sheri, Haripura, Surat. [Pan: Aahhp 8601 E] अपीलाथ" / Appellant ""यथ"/Respondent आ.अ.सं./I.T.A No.188/Srt/2019 "नधा"रण वष"/Assessment Year: 2011-12 Pankaj Kanwarlal Jain, V The Income Tax Officer, Ward-2(3)(8), Surat. Pro. Of M/S.Madhav Gems, S 203, Nishit Diamond Complex, . B/H World Diamond Centre, Hat Falia, Hripura, Surat. [Pan: Aczpj 5175 G] अपीलाथ" / Appellant ""यथ"/Respondent

Section 143(2)Section 143(3)

Rs.9,58,28,311/- made by Assessing officer by estimating the disallowance at the rate of 5% of the total alleged Bogus Purchase.. 2. It is therefore that addition made by the assessing officer and confirmed by CIT(A) may please be deleted.” 3. Grounds raised by the Revenue ... Ld.CIT(A) has erred in restricted the addition made by the AO of Rs.9,58,28,311/- on account of bogus purchases to 5%. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has failed to appreciate the fact that the entire purchase