← All Phrases

“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

Associate Plantations Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-8(2), Mumbai

In the result, the appeal of assessee is allowed

ITA 181/MUM/2018[2007-08]Status: DisposedITAT Mumbai07 May 2019AY 2007-08

Bench: Sri Mahavir Singh, Jm & Sri Nk Pradhan, Am Aayakr Apila Sam./ Ita No. 181/Mum/2018 (Inaqa-Arna Baya- / Assessment Year 2007-08) M/S Associate Plantations Pvt. The Asst. Commissioner Of Ltd. Income Tax, Central Circle 85-A, Sant Savta Marg, 8(2), Earnest House, Vs. Mustafa Bazar, Nariman Point, Mumbai Mumbai-400 010 .. (Apilaaqai- / Appellant) (P`%Yaqaai- / Respondent) स्थायी लेखा िं./Pan No. Aaaca5501B अपीलाथी की ओर े / Appellant By : Shri K Gopal & Ms. Neha Paranjpe, Ar प्रत्यथी की ओर े / Respondent By : Shri Satischandra Rajore, Dr ुनवाई की तारीख / Date Of Hearing: 07-05-2019 घोषणा की तारीख / Date Of Pronouncement : 07-05-2019

For Appellant: Shri K Gopal &For Respondent: Shri Satischandra Rajore, DR
Section 147Section 2Section 250Section 271(1)(c)Section 274

learned Counsel for the assessee stated that the originally the AO made disallowance at the rate of 12.5% being gross profit of the bogus purchases. Accordingly, the AO estimated the gross profit of the bogus purchases and made the addition of ₹ 13,70,094/- being 12.5% of the alleged bogus ... purchases. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) made enhancement of the bogus purchases and directed the AO to add the balance amount of bogus purchases of ₹ 95,63,253/-. According to the learned Counsel, the CIT(A) directed the AO to add the entire bogus

Lacier Industries, Mumbai vs. ITO WD 21(2)2, Mumbai

The appeal stands allowed in terms of our above order

ITA 7411/MUM/2016[2009-10]Status: DisposedITAT Mumbai07 May 2019AY 2009-10

Bench: Hon’Ble Shri C.N. Prasad, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Miss Aarti Sathe-Ld. ARFor Respondent: Shri Satish Chandra Rajore - Ld.DR
Section 133(6)Section 143(3)Section 148

initiated u/s 148 on the basis of the information received by the Income Tax Officer 21(2)(2), from DGIT (Inv.) Mumbai regarding the Bogus Purchases made by M/s Lacier Industries from M/s Asia Steel of Rs.5400/-, M/s Shiv Industries of Rs.48,48,974/- and M/s Maruti Steel 2 Traders ... Rs.216.20 Lacs. The reassessment proceedings were triggered pursuant to receipt of certain information from Sales Tax Department that the assessee stood beneficiary of alleged bogus purchases aggregating to Rs.99.48 Lacs stated to be made from three parties, the details of which have already been extracted in the quantum assessment order

ITO, Ward-2, Hanumangarh vs. Smt. Lalita Saraf, Hanumangarh Town

In the result, the appeals of the Department are dismissed and the Cross objections of the assessees are allowed

ITA 551/JODH/2018[ 2010-11]Status: DisposedITAT Jodhpur06 May 2019

Bench: Shri N.K. Sainithe Income Tax Officer, Vs Smt. Lalita Saraf, Ward-2, Hanumangarh C/O Mangi Lal Saraf, In Front Of Mandi Studio, Hanumangarh Town

Section 12A

goods. It was contended that the assessee could not produce the above parties so, the Assessing Officer made the addition @ 25% of the bogus purchases, therefore, the additions sustained by the Ld. CIT(A) was fully justified. It was further submitted that the Mumbai Bench of the Tribunal ... upheld the gross profit of Rs. 12.5% as against 4.3% declared by the assessee i.e. around three times of the bogus purchases while in the case of assessee the GP declared was at 3.01%. Therefore, no further relief is to be granted to the assessee. 18. I have considered

Consep Engineering Pvt.Ltd, Navi Mumbai vs. Income-Tax Officer, Ward - 3, Panvel

In the result, the appeal is dismissed

ITA 1073/PUN/2018[2011-12]Status: DisposedITAT Pune03 May 2019AY 2011-12

Bench: Shri R.S. Syalआयकर अपील सं. / Ita No.1073/Pun/2018 िनधा"रण वष" / Assessment Year : 2011-12

confirmation of addition of Rs.2,40,644/-. 3. Briefly stated, the facts of the case are that the assessee was found to have made bogus purchases amounting to Rs.2,40,644/-. On being called upon to prove the genuineness of 2 Consep Engineering Pvt. Ltd., the purchases, the assessee could ... appeal ex parte qua the assessee on merits. 5. It is noticed that the AO got information about the assessee having made bogus purchases of Rs.2,40,644/-. In the absence of the assessee substantiating the genuineness of the purchase 3 Consep Engineering Pvt. Ltd., transactions, the addition was made

Deputy Commissioner of Income Tax, Jaipur vs. M/S Gems Paradise, Jaipur

In the result, the appeal of the Revenue is dismissed

ITA 248/JPR/2019[2006-07]Status: DisposedITAT Jaipur03 May 2019AY 2006-07
For Appellant: Shri P.C. Parwal (CA)For Respondent: Shri P.P. Meena (Addl.CIT) fu/kZkfjrh dh vksj ls@

Jaipur for the A.Y. 2006-07, wherein the only issue involved which is against not sustaining the addition @ 25.5% of total bogus purchases made by the A.O. 2. At the time of hearing, the ld. AR of the assessee has raised an objection of maintainability of the appeal

ACIT, Circle - 34, Kolkata vs. Bhawarlal Aloke Kumar, Kolkata

Appeal is dismissed

ITA 779/KOL/2018[2014-15]Status: DisposedITAT Kolkata03 May 2019AY 2014-15

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2014-15 Acit, Cicle-34, V/S. Bhawarlal Aloke Kumar Aayakar Poorva, 7Th P-12, New Howrah Bridge Approach Road, 4Th Floor, Floor, 110, Shantipally, Kolkatka-107 Kolkta-700001 [Pan No.Aadfb 0620 N] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Robin Choudhury, Addl. Cit-Dr अपीलाथ" क" ओर से/By Appellant None ""यथ" क" ओर से/By Respondent 04-02-2019 सुनवाई क" तार"ख/Date Of Hearing 03-05-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee‘S Appeal For Assessment Year 2014-15 Arises Against The Commissioner Of Income Tax (Appeals)-10, Kolkata’S Order Dated 23.01.2018 Passed In Case No.224/Cit(A)-10/C-34/14-15/16-17/Kol, Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Case Called Twice. None Appears At The Assessee’S Behest Despite The Registry Having Sent An Rpad Notice. It Is Accordingly Proceeded Ex Parte. 2. Revenue’S Sole Substantive Grievance Raised In The Instant Appeal Seeks To Challenge Correctness Of Cit(A)’S Action Partly Upholding Assessing Officer’S Findings Disallowing Assessee’S Purchase(S) Of ₹3,22,28,000/- Only To The Extent Of 15% Vide Impugned Following Detailed Discussion:- “06. Findings &. Decision:

Section 143(3)

profit ratios in the line of appellant's business for the year under consideration. Hence, the Ld AO's allegation of appellant resorting to bogus purchases to reduce its profit is merely surmise and conjecture of ld. A/O and has no substance. g. The appellant has no statutory power ... Born) (2013) 35 taxman.com 384,(Bombay) "7. -----------we find that the Tribunal has deleted tile additions on account of bogus purchases nor only on the basis or stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that the Books of Accounts

Mr. Sharad Kumar Rampuria, Kolkata vs. ITO, Ward - 36(2), Kolkata

In the result, appeal of revenue is dismissed and that of the assessee is allowed

ITA 2470/KOL/2017[2008-09]Status: DisposedITAT Kolkata03 May 2019AY 2008-09

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 132Section 132(4)Section 143(3)Section 144Section 148

which was decided by order dated 15.12.2017, wherein the similar allegation was made by AO that the assessee of that case also had made bogus purchases from Mr. Rajendra Jain’s concern, though the assessee contended that purchases made were duly supported by documentary evidence was however, disallowed

ITO, Ward - 36(2), Kolkata vs. Shri Sharad Kumar Rampuria, Kolkata

In the result, appeal of revenue is dismissed and that of the assessee is allowed

ITA 2451/KOL/2017[2008-09]Status: DisposedITAT Kolkata03 May 2019AY 2008-09

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 132Section 132(4)Section 143(3)Section 144Section 148

which was decided by order dated 15.12.2017, wherein the similar allegation was made by AO that the assessee of that case also had made bogus purchases from Mr. Rajendra Jain’s concern, though the assessee contended that purchases made were duly supported by documentary evidence was however, disallowed

DCIT, Circle-12(1), Kolkata vs. M/S Dotex Merchandise Pvt. Ltd., Kolkata

In the result, appeal of the Revenue is dismissed and the cross objections are also dismissed as infructuous

ITA 1602/KOL/2016[2010-11]Status: DisposedITAT Kolkata03 May 2019AY 2010-11

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 133(6)Section 142(1)Section 143(1)Section 147Section 148Section 68

result of suppression of sales, in the assessments ultimately passed u/s 147/143(3) for these years the additions were made on account of bogus purchases. Applying the ratio laid down by the Hon’ble Bombay High Court in the case of CIT Vs Jet Airways ... which formed the basis of formation of belief that income had escaped assessment was not pursued and the additions were made on account of bogus purchase, the assessment order u/s 147/143(3) were therefore held to be legally unsustainable. 22. Applying the ratio laid down in foregoing decisions

Shri Amit L Kothari, Mumbai vs. Income Tax Ward-27(1)(1), Mumbai

Appeals are dismissed, accordingly

ITA 4118/MUM/2018[2010-11]Status: DisposedITAT Mumbai03 May 2019AY 2010-11

Bench: Shri Shamim Yahya & Shri Ravish Soodamit L. Kothari Income Tax Officer 35, Sarawati Bhuvan, Ward-27(1)(1), M.G.Road, Ghatkopar (West), Vs. Railway Station Tower No. 6, Mumbai -400086 Vashi, Navi Mumbai - 400703

For Appellant: NoneFor Respondent: Shri Chaitnya Anjaria, D.R
Section 133(6)Section 143(3)Section 147

Appeal) erred in upholding action of the Assessing Officer of making disallowance of purchases amounting to Rs.4,90,884/- being 12.5% of alleged bogus purchases of Rs.39,27,073/- without appreciating that the Assessing Officer made no independent inquiry while treating the purchases as bogus in nature and made disallowance ... case of the assessee before them, who was a trader, was to be worked out by bringing the G.P. rate of such bogus purchases at the same rate of other genuine purchases. We thus respectfully following the aforesaid judgment of the Hon‟ble High Court direct the A.O to restrict

Mr.Amarlal Dharmdas Kewalramani, Mumbai vs. Income Tax Officer-Ward 2(1), Mumbai

In the result, assessee’s appeals are partly allowed

ITA 4114/MUM/2018[2009-10]Status: DisposedITAT Mumbai03 May 2019AY 2009-10

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

These are appeals by the assessee wherein the assessee is aggrieved that learned CIT(A) has erred in sustaining 100% disallowance on account of bogus purchases as under :- A.Y. Amount (Rs.) 2009-10 1,69,784 2010-11 11,33,600 2011-12 23,89,800 2. The Assessing Officer ... these cases has made 100% addition on account of bogus purchases. Upon assessee’s appeal learned CIT(A) confirmed the same. Against the above order the assessee is in appeal before the ITAT. 3. We have heard both the counsel and perused the records. In support of his case learned

Nilesh S. Doshi, Mumbai vs. ITO-19(2)(4), Mumbai

The appeal of the assessee is partly allowed

ITA 3928/MUM/2018[2007-08]Status: DisposedITAT Mumbai03 May 2019AY 2007-08

Bench: Shri Shamim Yahya & Shri Ravish Soodnilesh S. Doshi Ito-19(2)(4) 902-C, Gundecha Gardens, Matru Mandir, Dattatam Khamkar Marg, Mumbai. Vs. Lalbaug, Mumbai – 400012 Pan – Aabpd1395E (Appellant) (Respondent) Appellant By: Shri Suchek Anchaliya, A.R Respondent By: Shri Chaitnya Anjaria, D.R Date Of Hearing: 24.04.2019 Date Of Pronouncement: 03.05.2019 O R D E R Per Ravish Sood, Jm The Present Appeal Filed By The Assessee Is Directed Against The Order Passed By The Cit(A)-2, Mumbai, Dated 01.02.2018, Which In Turn Arises From The Order Passed By The A.O Under Sec.143(3) R.W.S 147 Of The Income Tax Act, 1961 (For Short „I.T Act‟), Dated 05.03.2015. The Assessee Assailing The Order Of The Cit(A) Has Raised Before Us The Following Grounds Of Appeal:

For Appellant: Shri Suchek Anchaliya, A.RFor Respondent: Shri Chaitnya Anjaria, D.R
Section 133(6)Section 143(1)Section 143(3)Section 147

assessee, the ld. A.R placed on record a “Chart” reflecting the bifurcated details of its total turnover viz. (i) turnover corresponding to the alleged bogus purchases; and (ii) turnover corresponding to the genuine purchases. The Ld. A.R drawing support from the aforesaid „Chart‟ submitted that the overall G.P. rate ... further averred by him that as was discernible from the details provided in the „Chart‟, as its G.P. rate insofar the alleged „bogus purchases‟ were concerned, was substantially high as in comparison to the G.P. rate pertaining to its genuine purchases, therefore, no further addition/disallowance in context of such alleged

P.S.Construction, Mumbai vs. DCIT- CC - 1(3), Mumbai

In the result, both appeals filed by the assessee are

ITA 3229/MUM/2018[2014-15]Status: DisposedITAT Mumbai03 May 2019AY 2014-15

Bench: Shri G. Manjunatha & Shri Ravish Sood

CITA erred in confirming the disallowance aggregating to sum of Rs. 90,81,012/- made by the AO being alleged bogus purchase of Rs. 63,17,640 from M/s Aniket Enterprises and Rs.27,63,372/- from M/s Akash International. 7. On the facts and circumstances of the appellant's case ... case of N. K. Proteins Ltd. in SLP 759 of 2017, dated 16/01/2017 affirmed the findings of the Ld. AO in confirming alleged bogus purchases on the ground that when notices u/s 133(6) were issued to those parties, all notices were returned back with remark “not known”. Further, when

P.S.Construction, Mumbai vs. DCIT-CC- 1(3), Mumbai

In the result, both appeals filed by the assessee are

ITA 3228/MUM/2018[2013-14]Status: DisposedITAT Mumbai03 May 2019AY 2013-14

Bench: Shri G. Manjunatha & Shri Ravish Sood

CITA erred in confirming the disallowance aggregating to sum of Rs. 90,81,012/- made by the AO being alleged bogus purchase of Rs. 63,17,640 from M/s Aniket Enterprises and Rs.27,63,372/- from M/s Akash International. 7. On the facts and circumstances of the appellant's case ... case of N. K. Proteins Ltd. in SLP 759 of 2017, dated 16/01/2017 affirmed the findings of the Ld. AO in confirming alleged bogus purchases on the ground that when notices u/s 133(6) were issued to those parties, all notices were returned back with remark “not known”. Further, when

P.S.Construction, Mumbai vs. DCIT- CC- 1(3), Mumbai

In the result, both appeals filed by the assessee are

ITA 3227/MUM/2018[2012-13]Status: DisposedITAT Mumbai03 May 2019AY 2012-13

Bench: Shri G. Manjunatha & Shri Ravish Sood

CITA erred in confirming the disallowance aggregating to sum of Rs. 90,81,012/- made by the AO being alleged bogus purchase of Rs. 63,17,640 from M/s Aniket Enterprises and Rs.27,63,372/- from M/s Akash International. 7. On the facts and circumstances of the appellant's case ... case of N. K. Proteins Ltd. in SLP 759 of 2017, dated 16/01/2017 affirmed the findings of the Ld. AO in confirming alleged bogus purchases on the ground that when notices u/s 133(6) were issued to those parties, all notices were returned back with remark “not known”. Further, when

P.S.Construction, Mumbai vs. DCIT -CC -1(3), Mumbai

In the result, both appeals filed by the assessee are

ITA 3226/MUM/2018[2009-10]Status: DisposedITAT Mumbai03 May 2019AY 2009-10

Bench: Shri G. Manjunatha & Shri Ravish Sood

CITA erred in confirming the disallowance aggregating to sum of Rs. 90,81,012/- made by the AO being alleged bogus purchase of Rs. 63,17,640 from M/s Aniket Enterprises and Rs.27,63,372/- from M/s Akash International. 7. On the facts and circumstances of the appellant's case ... case of N. K. Proteins Ltd. in SLP 759 of 2017, dated 16/01/2017 affirmed the findings of the Ld. AO in confirming alleged bogus purchases on the ground that when notices u/s 133(6) were issued to those parties, all notices were returned back with remark “not known”. Further, when

Rajendra P. Jain, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Mumbai

The appeal stands partly allowed in terms of our above order

ITA 298/MUM/2018[2012-13]Status: DisposedITAT Mumbai03 May 2019AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri Vimal Punmiya- Ld. ARFor Respondent: Shri Awungshi Gimson - Ld. CIT DR
Section 132(1)Section 143(3)Section 145(3)Section 153ASection 234ASection 274

concerns as per following estimate: - No. Nature of Transactions Estimate Rate of Commission 1. Accommodation of bogus unsecured loans 2.4% 2. Accommodation of bogus purchases 0.075% 3. Accommodation of bogus imports made for 0.275% real importers 4. Estimated Expenses allowed against above 10% estimated commission income The aforesaid working resulted

Rajendra P. Jain, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Mumbai

The appeal stands partly allowed in terms of our above order

ITA 297/MUM/2018[2013-14]Status: DisposedITAT Mumbai03 May 2019AY 2013-14

Bench: Hon’Ble Shri Mahavir Singh, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri Vimal Punmiya- Ld. ARFor Respondent: Shri Awungshi Gimson - Ld. CIT DR
Section 132(1)Section 143(3)Section 145(3)Section 153ASection 234ASection 274

concerns as per following estimate: - No. Nature of Transactions Estimate Rate of Commission 1. Accommodation of bogus unsecured loans 2.4% 2. Accommodation of bogus purchases 0.075% 3. Accommodation of bogus imports made for 0.275% real importers 4. Estimated Expenses allowed against above 10% estimated commission income The aforesaid working resulted

Rajendra P. Jain, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Mumbai

The appeal stands partly allowed in terms of our above order

ITA 296/MUM/2018[2014-15]Status: DisposedITAT Mumbai03 May 2019AY 2014-15

Bench: Hon’Ble Shri Mahavir Singh, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri Vimal Punmiya- Ld. ARFor Respondent: Shri Awungshi Gimson - Ld. CIT DR
Section 132(1)Section 143(3)Section 145(3)Section 153ASection 234ASection 274

concerns as per following estimate: - No. Nature of Transactions Estimate Rate of Commission 1. Accommodation of bogus unsecured loans 2.4% 2. Accommodation of bogus purchases 0.075% 3. Accommodation of bogus imports made for 0.275% real importers 4. Estimated Expenses allowed against above 10% estimated commission income The aforesaid working resulted

ITO 27(1)(3), Mumbai vs. Harish Khushalchand Chandak, Mumbai

In the result this appeal filed by the revenue stands dismissed

ITA 2736/MUM/2018[2012-13]Status: DisposedITAT Mumbai03 May 2019AY 2012-13

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

Section 133(6)Section 69

This is an appeal by the Revenue wherein the Revenue is aggrieved that learned CIT(A) has not sustained 100% disallowance on account of bogus purchases. 2. The grounds of appeal read as under:- 1. "On the facts and circumstances of the case ... erred in estimating the profit from Hawala purchases by 2 Shri Harish Khushalchand Chandak disallowing only 15,98,703/- being 12.5% of the bogus purchases as even the basic onus of producing transport bills, delivery challans etc., were not fulfilled by the assessee." 3. "The appellant prays that the order