“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

Sv.P.N.S.N.Balasivaji Nadar & Sons, Virudhunagar vs. ITO Ward 4, Virudhunagar

In the result, all the appeals filed by the assessee are dismissed

ITA 2278/CHNY/2018[2011-12]Status: DisposedITAT Chennai12 Jul 2019AY 2011-12

Bench: Shri George Mathan

For Respondent: Smt.M.Subashri ,JCIT,D.R

Jain for coming to a conclusion that the concerns run by Shri. Bhanwarlal Jain and family, were providing accommodation entries in the nature of bogus purchases. We also find that these statements and the investigation reports relied on by the ld. Assessing Officer, were never put to the assessees, during ... statements and reports for resorting to a best of judgment assessment and made an addition of 25%, of what was considered by him as bogus purchases. It is not disputed that assessees had produced invoices from the concerned vendors and said invoices carried TIN as well as GST details

Sv.P.N.S.N.Balasivaji Nadar & Sons, Virudhunagar vs. ITO Ward 4, Virudhunagar

In the result, all the appeals filed by the assessee are dismissed

ITA 2277/CHNY/2018[2010-11]Status: DisposedITAT Chennai12 Jul 2019AY 2010-11

Bench: Shri George Mathan

For Respondent: Smt.M.Subashri ,JCIT,D.R

Sv.P.N.S.N.Balasivaji Nadar & Sons, Virudhunagar vs. ITO Ward 4, Virudhunagar

In the result, all the appeals filed by the assessee are dismissed

ITA 2276/CHNY/2018[2009-10]Status: DisposedITAT Chennai12 Jul 2019AY 2009-10

Bench: Shri George Mathan

For Respondent: Smt.M.Subashri ,JCIT,D.R

Income Tax Officer 12(1)(1), Mumbai vs. Ami Riddhi Chem Private Limited, Mumbai

In the result, both the appeals are dismissed

ITA 5358/MUM/2017[2010-11]Status: DisposedITAT Mumbai12 Jul 2019AY 2010-11

Bench: Shri C.N. Prasad, Hon'Ble & Shri Manoj Kumar Aggarwal, Hon'Blem/S. Ami Riddhi Chem Pvt. Ltd., V. Income Tax Officer – 9(1)(1) Office No. 16, 2Nd Floor Room No. 226/262, 2Nd Floor Building B-1, Laxmi Nivas Chs Ltd., Aayakar Bhavan, M.K. Road, Pai Nagar, S.V. Road Mumbai-400 020 Borivali (W), Mumbai – 400 092 Pan: Aagca 7111 H (Assessee) (Respondent) Income Tax Officer – 12(1)(1) V. M/S. Ami Riddhi Chem Pvt. Ltd., Room No. 226, 2Nd Floor Office No. 3, Gokul Apartment Aayakar Bhavan, M.K. Road, Haridas Nagar, Shimpoli Road Mumbai-400 020 Borivali (W), Mumbai – 400 092 Pan: Aagca 7111 H (Assessee) (Respondent) Assessee By : Shri Ajay Singh Department By : Shri Abdul Hakeem M

For Appellant: Shri Ajay SinghFor Respondent: Shri Abdul Hakeem M

Commissioner of Income Tax (Appeals)–20, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 12.05.2017 for the A.Y.2010-11 in partly sustaining the addition made towards bogus purchases. 2. Briefly stated the facts are that, during the assessment proceedings the Assessing Officer noticed that the assessee made purchases from six parties ... view of the above discussion, it is seen that the addition made by the AO on account of alleged bogus purchase cannot be sustained fully in appeal. The appellant has effected purchases from hawala dealers in four years from A.Y. 2009-10 to 2012-13 adopting same modus operandi. Therefore

Ami Riddhi Chem Private Limited, Mumbai vs. Income Tax Officer 9(1)(1), Mumbai

In the result, both the appeals are dismissed

ITA 5215/MUM/2017[2010-11]Status: DisposedITAT Mumbai12 Jul 2019AY 2010-11

For Appellant: Shri Ajay SinghFor Respondent: Shri Abdul Hakeem M

Aggarwal Associates (Promoters) Ltd., Delhi vs. DCIT, Ghaziabad

In the result the ground No

ITA 787/DEL/2016[2009-10]Status: DisposedITAT Delhi09 Jul 2019AY 2009-10

Bench: Shri H.S. Sidhu & Shri B.R.R. Kumaraggarwal Associates Vs Dcit, Central Circle, (Promoters) Ltd., Ghaziabad 10, New Rajdhani Enclave, Vikas Marg, Delhi- 92 (Pan: Aaaca2789D)

Section 132Section 143(2)Section 153A

also engaged in trading of Iron & Steel product, the Tribunal restricted the disallowance to 5% of the total alleged bogus purchases observing as under: "7. The Ld. AR of the Assessee in his submission claimed that VAT rate is only 4%. The rate of VAT is not disputed by Revenue ... Moreover, no incriminating material is brought on record except assumption and presumption of AO that assessee has availed accommodation bills. The addition of alleged bogus purchased are based on third party information. We are of the considered opinion that under Income Tax Act only real income can be taxed

Faisal Farook Vadgama, Mumbai vs. Income Tax Officer 20(1)(4), Mumbai

ITA 2129/MUM/2018[2010-11]Status: DisposedITAT Mumbai04 Jul 2019AY 2010-11

Bench: Shri C.N Prasad & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.2129/Mum/2018 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ Faisal Farooq Vadgama, Ito 20(1)(1), 2Nd Floor, Piramal Chambers, 203 White Angel, Mumbai V. 10, Maratha Mandir Road, Mumbai-400027 स्थायी ऱेखा सं./ Pan: Abvpv2284R (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) .. Assessee By: Shri. Faisal F. Vagama(Assessee In Person) Shri. Rajiv Gubgaotra (Dr) Revenue By: सुनवाई की तारीख /Date Of Hearing : 06.06.2019 घोषणा की तारीख /Date Of Pronouncement : 04.07.2019 आदेश / O R D E R Per Ramit Kochar: This Appeal, Filed By Assessee, Being Ita No. 2129/Mum/2018, Is Directed Against Appellate Order Dated 05.12.2017, Passed By Learned Commissioner Of Income Tax (Appeals)-32, Mumbai (Hereinafter Called “The Cit(A)”) In Appeal Number Cit(A)-32/It-502/Ito-20(1)(4)/15-16, For Assessment Year 2010-11, The Appellate Proceedings Had Arisen Before Learned Cit(A) From Assessment Order Dated 01.02.2016 Passed By Learned Assessing Officer (Hereinafter Called “The Ao”) U/S 143(3) R.W.S. 147 Of The Income-Tax Act, 1961 (Hereinafter Called “The Act”) For Ay 2010-11. I.T.A. No.2129/Mum/2018

For Appellant: Shri. Faisal F. Vagama(Assessee in Person)

Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

under:- “1) Both the lower authorities erred in holding that an amount of Rs. 87,85,369/-be required to be disallowed as bogus purchases. 2) The appellant submits the disallowance is unjustified because no valid satisfaction is recorded by either of the lower authorities, and without considering the facts ... Sales Tax Department has carried out investigations and published a list of parties who provides accommodation bills and list of beneficiaries of these alleged bogus purchases. The assessee was listed as one of beneficiaries of accommodation entries by way of bogus purchases without actual delivery of goods from the following

DCIT RG- 9(1)(2), Mumbai vs. Atc India Tower Corporation Pvt. Ltd., Mumbai

The appeal stands dismissed

ITA 5955/MUM/2017[2008-09]Status: DisposedITAT Mumbai03 Jul 2019AY 2008-09

Bench: Hon’Ble Shri Saktijit Dey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ I.T.A. No.5955/Mum/2017 (िनधा"रण वष" / Assessment Year: 2008-09) Dcit-9(1)(2) M/S. Atc India Tower Corporation Pvt. Ltd. Room No.260-A, 2Nd Floor [Formerly Known As Xcel Telecom Pvt. Ltd.] बनाम नाम नाम/ नाम 37/38, L.K. Arcade, Marol Naka Aaykar Bhavan, M.K. Road Vs. Marol, Andheri (E) Mumbai-400 020 Mumbai-400 059. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aajcs-7669-H (अपीलाथ"/Appellant) (ू"यथ" / Respondent) : Revenue By : Sh. Anadi Varma – Ld. Cit-Dr Assessee By : Sh. Satyen Sethi - Ld.Ar सुनवाईक"तार"ख/ : 11/04/2019 Date Of Hearing घोषणाक"तार"ख / : 03/07/2019 Date Of Pronouncement आदेश / O R D E R

For Appellant: Sh. Satyen Sethi - Ld.ARFor Respondent: Sh. Anadi Varma – Ld. CIT-DR

Section 133(6)Section 143(3)Section 147

file fresh confirmation from these parties. However, the assessee failed to do so which led the Ld. AO to treat the aforesaid purchases as bogus purchases and accordingly, the depreciation claimed against the purchases amounting to Rs.1.54 Crores was disallowed whereas the balance amount of Rs.8.75 crores was reduced from ... from Aster Infrastructure P. Ltd. and RN Infra Communication P. Ltd. amounting to Rs.10,30,49,061/-were rejected and same were considered as bogus purchases and consequently an unexplained expenditure on the part of the appellant. Since the expenditure claimed was capital in nature, therefore, the Id.A.O. disallowed

Sea Linkers P.Ltd, Mumbai vs. ACIT 8(1)(2), Mumbai

In the result, appeal of the assessee in ITA no

ITA 2297/MUM/2017[2010-11]Status: DisposedITAT Mumbai03 Jul 2019AY 2010-11

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.2297/Mum/2017 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ M/S. Sea Linkers Private Acit 8(1)(2), Ltd., Aayakar Bhavan, Bpt, Plot No. 107, M.K Road V. Quay Street, Darukhana, Mumbai-400020 Mumbai-400010 स्थायी ऱेखा सं./ Pan: Aahcs5084N (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) .. Assessee By: Shri. Deepak Tralshawala Revenue By: Shri. Manish Kumar Singh,Dr

For Appellant: Shri. Deepak TralshawalaFor Respondent: Shri. Manish Kumar Singh,DR

Section 143(3)

Learned Commissioner of Income tax (Appeals), erred inter alia a) in sustaining the addition to the extent of 12.5% of the alleged bogus purchases by holding in para 5.3 of his order "Looking into the entirety of the facts, therefore in my considered opinion only the profit derived ... receipt of cash by the assessee as alleged by him . c). by holding in his order that the purchases made by the assessee were "bogus purchases", while not disputing the sales made from these purchases, which are genuine and which were booked in the regular books of accounts and which

J.K. Jewellers International, Jaipur vs. Income Tax Officer, Ward-6-2, Jaipur

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

ITA 29/JPR/2019[2010-11]Status: DisposedITAT Jaipur01 Jul 2019AY 2010-11

Bench: Or At The Time Of Hearing.”

For Appellant: Shri S.L. Poddar (Advocate)For Respondent: Shri J.C. Kulhari (JCIT)

Section 143(3)Section 148

addition of Rs. 10,00,000/- out of Rs. 60,79,802/- made by the learned AO by disallowing 25 percent of total alleged bogus purchases of Rs. 2,43,19,210/- without considering the submission of the assessee. 3. The assessee craves your indulgence to add amend or alter

Dharmendra Sobhnath Singh, Mumbai vs. Income Tax Officer Ward 2(1), Thane

In the result these appeals by the assessee allowed for statistical purposes

ITA 4437/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Jul 2019AY 2009-10

Bench: Shri Shamim Yahya (Am)

appeals by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases, vide common order dated 11.5.2018 pertaining to A.Y. 2009- 10, 2010-11 & 2011-12. 2. Brief facts of the case are that the assessee ... trader in steel. Assessment in this case was reopened upon receipt of information from sales tax department that assessee has made bogus purchases. The assessee submitted that purchase vouchers and the payments were made through banking channel. However the suppliers were not produced before the Assessing Officer. Sales in this

M/S.Ajit Metal Syndicate, Mumbai vs. Income Tax Officer Ward 19(1)(1), Mumbai

In the result these appeal by the assessee are allowed for statistical purposes

ITA 4170/MUM/2018[2010-11]Status: DisposedITAT Mumbai01 Jul 2019AY 2010-11

Bench: Shri Shamim Yahya (Am)

appeals by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases vide respective orders pertaining to A.Y. 2010-11 & 2011-12. 2. Brief facts of the case are that assessment in this case was reopened upon ... receipt of information from the sales tax Department that assessee has made bogus purchases. The assessee submitted the purchase vouchers and the payments were made through banking channel. However, the suppliers were not produced before the Assessing Officer. Sales in this case were not doubted. The Assessing Officer in this

Allwyn Metals, Mumbai vs. Income Tax Officer Ward 19(1)(1), Mumbai

In the result, all these appeals by the assessee are partly allowed

ITA 4167/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Jul 2019AY 2009-10

Bench: Shri Shamim Yahya (Am)

appeals by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases vide separate orders pertaining to A.Y. 2009-10 to 2011-12. 2. Brief facts of the case are that assessment in this case was reopened ... upon receipt of information from the sales tax Department that assessee has made bogus purchases. The assessee submitted the purchase vouchers and the payments were made through banking channel. However, the suppliers were not produced before the Assessing Officer. Sales in this case were not doubted. The Assessing Officer

Ebrahim Currim & Sons, Mumbai vs. ITO -WD- 18()(4), Mumabi

In the result, all these appeals filed by the assessee stand partly allowed as above

ITA 3159/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Jul 2019AY 2009-10

Bench: Shri Shamim Yahya (Am)

appeals by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases vide separate orders pertaining to A.Y. 2009-10 to 2011-12. 2. Brief facts of the case are that the assessee is engaged ... business of manufacturing and selling of umbrellas. Information was received from the sales tax Department that assessee has made bogus purchases. The assessment was accordingly reopened. The Assessing Officer in this case has made 25% addition on account of bogus purchases as under

M/S. Gl Litmus Events Pvt. Ltd., New Delhi vs. ACIT, New Delhi

Appeal of the assessee is partly allowed

ITA 2502/DEL/2015[2011-12]Status: DisposedITAT Delhi01 Jul 2019AY 2011-12

Bench: Shri Prashant Maharishi & Shri K. N. Charygl Litmus Events Pvt. Ltd, The Assistant Commissioner Vs. B-90, Second Floor, Of Income Tax Vishwakarma Colony, New Delhi Central Circle-7, New Delhi Pan: Aadcg6909N (Appellant) (Respondent)

For Appellant: Shri S. K. Tulsiyan, AdvFor Respondent: Shri Sanjay I Bara, CIT DR

Section 143Section 144CSection 153ASection 292CSection 37Section 69Section 92C

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “I-I”: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. N

Bharat Talakchand Doshi, Mumbai vs. Assistant Commissioner of Income Tax 17(1), Mumbai

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

ITA 493/MUM/2018[2009-10]Status: DisposedITAT Mumbai28 Jun 2019AY 2009-10

Bench: Shri Mahavir Singh () & Shri N.K. Pradhan () Assessment Year: 2009-10 Shri Bharat Talakchand Asst. Commissioner Of Doshi, 9, Krishna Kunj, 2Nd Income Tax 17(1), R. No. Vs. Floor, 148-P K Road, 117, Aayakar Bhavan, M.K. Mulund West, Mumbai- Road, Mumbai-400020. 400080. Pan No. Aabpd9162B Appellant Respondent Assessee By : Mr. Rahul Hakani, Ar Revenue By : Mrs. Jyoti Laxmi Nayak, Sr. Dr Date Of Hearing : 10/06/2019 Date Of Pronouncement: 28/06/2019

For Appellant: Mr. Rahul Hakani, ARFor Respondent: Mrs. Jyoti Laxmi Nayak, Sr. DR

Section 143(1)Section 143(3)Section 148

grounds of appeal filed by the assessee read as under: 1. Ld. CIT(A) erred in enhancing addition of alleged bogus purchase from 3 parties by Rs.1,02,81,940/- [original disallowance by AO was Shri Bharat Talakchand Doshi 2 Rs.14,68,848/- being 12.5% of total alleged bogus purchase ... hence, the enhancement of Rs.1,02,81,940/- maybe deleted. 2. The Ld. CIT(A) and A.O. erred in making addition of alleged bogus purchases merely on the basis of sales tax enquiry and hence the disallowance of Rs.1,17,50,778/- may be deleted

Smaru Gems, Mumbai vs. ITO - 19(3)(3), Mumbai

In the result these appeals by the assessee allowed for statistical purposes

ITA 3622/MUM/2018[2011-12]Status: DisposedITAT Mumbai28 Jun 2019AY 2011-12

Bench: Shri Shamim Yahya (Am) & Shri Ravish Sood (Jm)

assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 4.08% and 3.77% respectively disallowance on account of bogus purchases vide separate orders for concerned assessment years. 2. Brief facts of the case are that the assessment in this case was reopened upon receipt ... information from the Sales Tax Department that assessee has made bogus purchases and has received accommodation entries from Mr. Rajendra Jain. The assessee submitted the purchase vouchers and the payments were made through banking channel. However, the suppliers were not produced before the Assessing Officer. Sales in this case were

Pravin Dayaldas Gandhi, Mumbai vs. ITO - 32(2)(5), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3532/MUM/2018[2010-11]Status: DisposedITAT Mumbai28 Jun 2019AY 2010-11

Bench: Shri Mahavir Singh & Shri Rajesh Kumar

For Appellant: Shri Ishwar Prakash Rathi, A.RFor Respondent: Shri Arvind Kumar, D.R

Section 114Section 133(6)Section 143(1)Section 143(3)Section 147Section 148Section 69C

pressed. 4. The issue raised in ground No.2 is against the confirmation of disallowance to the tune of 12.5% of the alleged bogus purchases of Rs.1,11,71,532/- thereby sustaining an addition of Rs.13,96,441/- which is over and above the gross profits shown by the assessee ... appellate proceedings, the Ld. CIT(A) partly allowed the appeal of the assessee by sustaining the addition to the extent of 12.5% of the bogus purchases thereby confirming the addition to the extent of Rs.13,96,441/- by following the decision of Hon’ble Bombay High Court in the case

Deputy Commissioner of Income Tax Central Circle-4(1), Central Range-4, Pr.CIT (C)-2, Mumbai vs. Melstar Information Technologies Ltd, Mumbai

ITA 6385/MUM/2017[2012-13]Status: DisposedITAT Mumbai28 Jun 2019AY 2012-13

Bench: Shri Shamim Yahya & Shri Ravish Sooddeputy Commissioner Of Income M/S Melstar Information Tax, Central Circle-4(1), Technologies Ltd, R. No. 1916, 19Th Floor, Mestar House, G-4, Air India Building, Vs. Midc, Cross Road, Nariman Point, „A‟ Andheri (E), Mumbai – 400 021 Mumbai – 400 093

For Appellant: Shri D.G. Pansari, Sr. D.RFor Respondent: None

Section 132Section 132(4)Section 153C

circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition of Rs.26,66,42,549/- on account of bogus purchases to Rs.53,32,850/-, booked by the assessee in the year under consideration specifically when the assessee could not prove the genuineness of purchases ... facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in restricting the disallowance of bogus purchases without appreciating/that the decision of Hon‟ble Supreme Court in the case of M/s N.K. Proteins Ltd. vs. DCIT (2017- TIOL

Anmol International, Mumbai vs. ITO 24(1)(3), Mumbai

ITA 3434/MUM/2016[2009-10]Status: DisposedITAT Mumbai28 Jun 2019AY 2009-10

Bench: Shri Saktijit Dey & Shri G. Manjunatha

Section 133(6)Section 143(3)

facts that when the books being not rejected & accepted as true, the book results cannot be disturbed by making addition for bogus purchases. 3. The learned CIT(A) has erred in law & in facts to appreciate that the books of accounts has to be treated as evidence except proving ... learned CIT(A) has erred in law & facts to confirm addition to the extent of Rs. 1,03,50,8627- on the ground of bogus purchase & to confirm addition of Rs. 1,03,50,8627- being 25% of gross profit on purchases. 2. The learned CIT(A) has erred