“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

Milind Padmakar Mudawadkar, Dhule vs. Assistant Commissioner of Income Tax, Dhule

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

ITA 1162/PUN/2017[2010-11]Status: DisposedITAT Pune22 Jun 2018AY 2010-11

Bench: Shri D. Karunakara Rao, Am आयकर अपील सं. / Ita No.1162/Pun/2017 िनधा"रण वष" / Assessment Year : 2010-11

For Appellant: None

Section 133(6)Section 147Section 148

declaring total income of Rs.15,45,770/-. Based on the information received from Sales Tax Department relating to providing of the bogus purchase bills, AO issued notice u/s.148 of the Act. AO noticed that assessee purchased the goods from Hitech Impex, Deep Enterprises and Ghatalia Steels (whose names are listed ... with the evidence regarding trail of goods. I find the Pune Bench of the Tribunal passed series of decisions on the issues relating to bogus purchase. In the background of the above facts, I perused the decision of Coordinate Bench of the Tribunal in the case of M/s. Chhabi Electricals

Dhiraj Babulal Jain, Mumbai vs. Income Tax Officer 19(1)(4), Mumbai

Appeal stand dismissed

ITA 1843/MUM/2018[2011-12]Status: DisposedITAT Mumbai22 Jun 2018AY 2011-12

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am

For Appellant: NoneFor Respondent: N. Hemalatha, Ld. DR

Section 133(6)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

Mumbai, Appeal No. CIT(A)-54/IT-714/ITO- 19(1)(4)/2015-16 dated 22/12/2017 qua confirmation of certain additions on account of alleged bogus purchases. The assessment for impugned ITA.No.1843/Mum/2018 Dhiraj Babulal Jain Assessment Year- 2011-12 AY was framed by Ld. Income Tax Officer 19(1)(4), Mumbai ... basis of material available on record and after hearing Ld. Departmental Representative [DR]. The issue involved under appeal is estimated addition against certain alleged bogus purchases. 2.1 The reassessment proceedings were initiated upon receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchase bills

Inventum Engineering Company Private Limited, Mumbai vs. Income Tax Officer 10(1)(2), Mumbai

Appeal stand partly allowed

ITA 1836/MUM/2018[2011-12]Status: DisposedITAT Mumbai22 Jun 2018AY 2011-12

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am

For Appellant: Rahul R. Sarda, Ld.ARFor Respondent: N. Hemalatha, Ld. DR

Section 133(6)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

Income-Tax (Appeals)-17 [CIT(A)], Mumbai, Appeal No.CIT(A)-17/IT-103/10159/17- 18 dated 22/01/2018 qua confirmation of certain additions on account of alleged bogus purchases. The assessment for impugned AY was framed ITA.No.1836/Mum/2018 Inventum Engineering Company Pvt.Ltd Assessment Year- 2011-12 by Ld. Income Tax Officer ... filed by the assessee on 29/09/2011 which was processed u/s 143(1). The only issue involved under appeal is estimated addition against certain alleged bogus purchases. 2.1 The reassessment proceedings were initiated upon receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchase bills

Ramesh Kumar Jawanmalji Sakaria, Mumbai vs. Income Tax Officer 19(3)(1), Mumbai

Appeal stand dismissed

ITA 1817/MUM/2018[2010-11]Status: DisposedITAT Mumbai22 Jun 2018AY 2010-11

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am

For Appellant: NoneFor Respondent: N. Hemalatha, Ld. DR

Section 133(6)Section 143(1)Section 143(2)Section 147Section 148

Mumbai, Appeal No.CIT(A)-53/IT-212/ITO- 19(3)(1)/2017-18 dated 01/01/2018 qua confirmation of certain additions on account of alleged bogus purchases. The assessment for impugned AY was framed by Ld. Income Tax Officer 19(3)(1), Mumbai [AO] u/s ITA.No.1817/Mum/2018 Ramesh Kumar Jawanmalji Sakaria Assessment Year ... basis of material available on record and after hearing Ld. Departmental Representative [DR]. The issue involved under appeal is estimated addition against certain alleged bogus purchases. 2.1 The reassessment proceedings were initiated upon receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchase bills

Irfan Mukarab Khilji, Mumbai vs. Income Tax Officer, Ward 26(1)(5), Mumbai

The appeal stand partly allowed in terms of our above order

ITA 1816/MUM/2018[2009-10]Status: DisposedITAT Mumbai22 Jun 2018AY 2009-10

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am

For Appellant: Dinesh Rasiklal Shah &For Respondent: N. Hemalatha, Ld. DR

Section 133(6)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

Appeals)-38 [CIT(A)], Mumbai, Appeal No.CIT(A)- 38/ITO.26(1)(5)/IT.60/2015-16 dated 30/11/2016 qua confirmation of certain additions on account of alleged bogus purchases. The ITA.No.1816/Mum/2018 Irfan Mukarab Khilji Assessment Year- 2009-10 assessment for impugned AY was framed by Ld. Income Tax Officer- 26(1)(5), Mumbai ... Lacs filed by the assessee on 24/09/2009 which was processed u/s 143(1). The sole issue under appeal is quantum addition against certain alleged bogus purchases. During impugned AY, the assessee was engaged as manufacture and trader under proprietorship concern namely M.K.Forge. The assessee declared gross profit

ITO 25(2)(3), Mumbai vs. Dilip Anant Potnis, Mumbai

In the result, Revenue’s appeal is dismissed

ITA 903/MUM/2017[2009-10]Status: DisposedITAT Mumbai22 Jun 2018AY 2009-10

Bench: Shri Shamim Yahya & Shri Saktijit Dey

For Appellant: NoneFor Respondent: Shri Ram Tiwari

Section 133(6)Section 143(3)Section 147Section 69C

dispute in the present appeal is confined to the decision of the learned Commissioner (Appeals) in restricting the addition to 12.5% on the alleged bogus purchases. 2 Shri Dilip Anant Potnis 3. Brief facts are, the assessee an individual is a manufacturer and dealer of commercial kitchen equipment through ... absence of corresponding purchases the assessee could not have effected the sales. Therefore, he ultimately restricted the addition to 12.5% of the alleged bogus purchases. 5. When the appeal was called for hearing no one was present for the assessee. Even, there is no application filed by the assessee

ACIT 30(3), Mumbai vs. Shreedham Builders, Mumbai

ITA 5589/MUM/2017[2012-13]Status: DisposedITAT Mumbai22 Jun 2018AY 2012-13

Bench: Shri Joginder Singh & Shri N.K. Pradhanassessment Year: 2012-13 Acit-30(3), Shreedham Builders, R. No.510, 5Th Floor, 105/106, 1St Floor, बनाम/ Pratayakshkar Bhavan, Vijay Indl. Estate, Vs. Bandra Kurla Complex, Malad (W), Bandra (East), Mumbai-400064 Mumbai-400051 (राज"व /Revenue) ("नधा"रती /Assessee) P.A. No. Abdfs0133N

Section 143(1)Section 143(2)Section 68

Assessing Officer has relied on the information received from DGIT(Inv), Mumbai regarding the details of accommodation entries provided in the nature of bogus purchases/ sale bills and unsecured 13 Shreedham Builders loans by Shri Pravin Kumar Jain Group. Further the Assessing Officer has stated in the order that DGIT

Dhanlaxmi Fabrics Ltd, Thane vs. Asst CIT Cir 1, Kalyan

In the result, appeals of the assessee are partly allowed as indicated above

ITA 7328/MUM/2016[2012-13]Status: DisposedITAT Mumbai22 Jun 2018AY 2012-13

Bench: Shri Rajendra, Hon'Ble & Shri C.N. Prasad, Hon'Ble

For Appellant: Shri Shailesh N. DoshiFor Respondent: Shri Ram Tiwari

Section 133(6)

Assessment Years 2010-11 & 2011-12 are concerned the first issue is in respect of the partly sustaining the addition made towards bogus purchases. M/s. Dhanlaxmi Fabrics Ltd 3. Briefly stated the facts are that, the Assessing Officer noticed that assessee made certain purchases from dealers which are reported ... purchase bills issued are only accommodation entries. Simply because the Assessee could not produce the dealers, the entire purchases cannot be treated as bogus purchases. The Assessing Officer could have made further investigations to ascertain the genuineness of the transactions. 10. We find that on identical situation and facts

Dhanlaxmi Fabrics Ltd, Thane vs. Asst CIT Cir 1, Kalyan

In the result, appeals of the assessee are partly allowed as indicated above

ITA 7327/MUM/2016[2011-12]Status: DisposedITAT Mumbai22 Jun 2018AY 2011-12

Bench: Shri Rajendra, Hon'Ble & Shri C.N. Prasad, Hon'Ble

For Appellant: Shri Shailesh N. DoshiFor Respondent: Shri Ram Tiwari

Section 133(6)

Dhanlaxmi Fabrics Ltd, Thane vs. Asst CIT Cir 1, Kalyan

In the result, appeals of the assessee are partly allowed as indicated above

ITA 7326/MUM/2016[2010-11]Status: DisposedITAT Mumbai22 Jun 2018AY 2010-11

Bench: Shri Rajendra, Hon'Ble & Shri C.N. Prasad, Hon'Ble

For Appellant: Shri Shailesh N. DoshiFor Respondent: Shri Ram Tiwari

Section 133(6)

Aslam Brahim Malim, Mumbai vs. ITO 15(3)(3), Thane

Appeal stand partly allowed

ITA 4725/MUM/2015[2010-11]Status: DisposedITAT Mumbai22 Jun 2018AY 2010-11

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am

For Appellant: NoneFor Respondent: N. Hemalatha, Ld. DR

Section 133(6)Section 143(3)Section 69C

Mumbai, Appeal No. CIT(A)-26/IT-69/15(3)(3)/13- 14 dated 29/05/2015 qua confirmation of certain additions on account of alleged bogus purchases. The assessment for impugned AY was framed ITA.No.4725/Mum/2015 Aslam Ibrahim Malim Assessment Year- 2010-11 by Ld. Income Tax Officer-15(3)(3), Mumbai ... defending the purchases, submitted copies of invoices and submitted that payments were through banking channels. However, not convinced, Ld. AO treated the same as bogus purchases and added the same to the income of the assessee. 3. Aggrieved, the assessee contested the same without partial success before

ACIT, New Delhi vs. M/S. Raqunak International Limited, New Delhi

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

ITA 6081/DEL/2014[2011-12]Status: DisposedITAT Delhi22 Jun 2018AY 2011-12

Bench: Shri Amit Shukla & Shri O.P. Kant

For Appellant: Sh. M.K. Madan (Adv.)For Respondent: Sh. Atiq Ahmed (Sr. DR)

Section 143(2)Section 143(3)Section 14ASection 43B

appellant has made a profit of Rs. 2.99 lacs. Therefore, to assume that the appellant concealed any profit or any income by entering into bogus purchase transaction involving Reliable Metal (India) was baseless. 4.2.15 I note that the AO has examined the stock register. The AR has filed the copy ... would be no merit in accepting sales figures also. In case the AO had found that the appellant had incurred any loss by accounting bogus purchases, there could have been merit 8 ITA Nos. 5610 & 6081/Del/2014. Raunaq International Ltd.,New Delhi. in the disallowance. In the instant case the appellant

M/S. Raunaq International Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 5610/DEL/2014[2011-12]Status: DisposedITAT Delhi22 Jun 2018AY 2011-12

Bench: Shri Amit Shukla & Shri O.P. Kant

For Appellant: Sh. M.K. Madan (Adv.)For Respondent: Sh. Atiq Ahmed (Sr. DR)

Section 143(2)Section 143(3)Section 14ASection 43B

ITO WD 2(5), Kalyan vs. Hasmukharai & Co., Ambernath

The appeals of the Revenue are dismissed

ITA 193/MUM/2016[2010-11]Status: DisposedITAT Mumbai21 Jun 2018AY 2010-11

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

Section 51

Assessment Year 2009-10) and Rs.48,95,720/-(Assessment Year 2010-11) out of the addition of Rs.65,27,628/- made on account of bogus purchase despite holding that the purchases were not genuine and the assessee failed to prove the genuineness of the transactions. 2. During hearing ... dated 22/02/2011, observed/held as under:- “The question raised in this appeal is, whether the Tribunal was justified in deleting the addition on account of bogus purchases allegedly made by the assessee from M/s. Thakkar Agro Industrial Chem Supplies P. Ltd. According to the revenue, the Director of M/s. Thakkar Agro

ITO WD 2(5), Kalyan vs. Hasmukharai & Co., Ambernath

The appeals of the Revenue are dismissed

ITA 192/MUM/2016[2009-10]Status: DisposedITAT Mumbai21 Jun 2018AY 2009-10

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

Section 51

Assistant Commissioner of Income-Tax vs. Kakade Infrastructure Pvt. Ltd., Pune

In the result, appeal of the Revenue is dismissed

ITA 854/PUN/2015[2010-11]Status: DisposedITAT Pune20 Jun 2018AY 2010-11

Bench: Shri Anil Chaturvedi, Am & Shri Vikas Awasthy, Jm

For Appellant: Shri HarikrishanFor Respondent: Shri Rajeev Kumar &

Section 131Section 139(1)Section 143(2)Section 143(3)Section 148

admitted that purchases to the tune of Rs.3,46,00,000/- pertaining to the year were not genuine. He agreed to pay tax on bogus purchases. However, while filing return of income u/s.139(1) of the Act, the assessee did not honour his declaration. During pendency of scrutiny assessment proceedings ... pointed that Shri Sanjay Kakade, Director of assessee-company in his statement recorded u/s. 131 of the Act on 21.01.2011 admitted bogus purchases to the tune of Rs.3,46,00,000/-. However, while filing return of income, assessee did not mention bogus purchases. During assessment proceedings, assessee filed fresh computation

Shreya Jayant Joshi, Nashik vs. Income Tax Officer

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

ITA 48/PUN/2017[2010-11]Status: DisposedITAT Pune20 Jun 2018AY 2010-11

Bench: Shri D. Karunakara Rao, Am आयकर अपील सं. / Ita Nos.47 & 48/Pun/2017 िनधा"रण वष" / Assessment Years : 2009-10 & 2010-11

For Appellant: Smt. Deepa Khare

Section 133(6)Section 147Section 148Section 41(1)

declaring total income of Rs.6,19,921/-. Based on the information received from Sales Tax Department relating to providing of the bogus purchase bills, AO issued notice u/s.148 of the Act. AO noticed that assessee purchased the goods from P.K. Trading Company (whose name is listed in the bogus dealers ... genuine. The notice sent to the party was returned back unserved. Eventually, the AO made addition of Rs.6,55,644/- treating the same as bogus purchases and assessed the income of the assessee at Rs.12,75,570/-. 3. In the First Appellate Proceedings, the CIT(A) confirmed the addition made

Shreya Jayant Joshi, Nashik vs. Income Tax Officer

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

ITA 47/PUN/2017[2009-10]Status: DisposedITAT Pune20 Jun 2018AY 2009-10

Bench: Shri D. Karunakara Rao, Am आयकर अपील सं. / Ita Nos.47 & 48/Pun/2017 िनधा"रण वष" / Assessment Years : 2009-10 & 2010-11

For Appellant: Smt. Deepa Khare

Section 133(6)Section 147Section 148Section 41(1)

M/S. Aniket Trading Company, Nashik vs. Deputy Commissioner of Income Tax, Nashik

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

ITA 467/PUN/2017[2010-11]Status: DisposedITAT Pune20 Jun 2018AY 2010-11

Bench: Shri D. Karunakara Rao, Am आयकर अपील सं. / Ita No.467/Pun/2017 िनधा"रण वष" / Assessment Year : 2010-11

For Appellant: Shri Sanket JoshiFor Respondent: Dr. Vivek Aggarwal

Section 131Section 133ASection 139(1)Section 142(1)Section 143(3)Section 147

there was survey action u/s.133A by the Investigation Wing by the DDIT (Inv.)-1, Nashik which resulted in discovered facts relating to bogus purchases by the assessee. Assessee’s statement u/s.131 was recorded whereby assessee 2 M/s. Aniket Trading Company admitted the claim relating to bogus purchases. Subsequently, a notice ... assessee and eventually completed the assessment u/s.143(3) r.w.s.147 of the Act. AO treated the entire bogus purchases amounting to Rs.28,24,410/- that involves two suppliers namely (1) Simandhar Trading Corporation and M/s. Adijin Enterprises. These names are mentioned in the list maintained by the Sales Tax Department

Alloy Steel Emporium Pvt. Ltd., Kolkata vs. ITO, Ward-4(3), Kol., Kolkata

In the result, the appeal of the assessee is allowed

ITA 286/KOL/2017[2006-07]Status: DisposedITAT Kolkata20 Jun 2018AY 2006-07

Bench: Shri P.M. Jagtap, Am] I.T.A. No. 286/Kol/2017 Assessment Year: 2006-07 M/S. Alloy Steel Emporium Pvt. Ltd..................................………………………………….Appellant 10, Clive Row, 6Th Floor, Kolkata – 700 001. [Pan: Aacca 5738 N] Ito, Ward 4(3) Kolkata...................…………………………………………….....................Respondent Aayakar Bhawan, Kolkata – 700 069. Appearances By: Shri Subash Agarwal, Advocate Appearing On Behalf Of The Assessee. Shri D.C. Mondal, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : May 29, 2018 Date Of Pronouncing The Order : June 20, 2018 Order This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit (Appeals) – 17, Kolkata Dated 10.06.2016 & Grounds Raised Therein Read As Under: “1. That The Assessment Order Dated 04.03.2014 Framed U/S 147/143(3) Is Void & Nullity In The Eyes Of Law As There Are No Recorded Reasons To Belief That The Income Chargeable To Tax Escaped Assessment. 2. That Without Prejudice To Ground No 1 Stated Above, The Recorded Reasons Are Invalid & Improper & As Such, The Assessment Framed Vide Order Dated 04.03.2014 Is Bad In Law In The Eye Of Law. 3. That The Facts & Circumstances Of The Case The Ld. Cit(A) Was Not Justified In Confirming The Addition Of Rs. 30,66,273/- Made By The A.O. On Account Of Bogus Purchase.”

Section 133ASection 143(1)Section 143(3)Section 147Section 148

case the Ld. CIT(A) was not justified in confirming the addition of Rs. 30,66,273/- made by the A.O. on account of bogus purchase.” 2. At the time of hearing before the Tribunal, the learned counsel for the assessee has not pressed ground ... confirmed by the Ld. 2 I.T.A. No. 286/Kol/2017 Assessment Year: 2006-07 M/s. Alloy Steel Emporium Pvt. Ltd. CIT(A) on account of bogus purchases, the relevant facts are as follows: The assessee in the present case is a company which is engaged in the business of trading of steel