Bogus purchases

Complete Guide for Taxation of Bogus or Hawala Purchase from suspicious dealer

Income Tax - Maharashtra Sales Tax Department has published ‘List of Suspicious Dealers, who have issued false bills, without delivery of goods. Such dealers have commonly referred as ‘hawala dealers’ The fact that the list purports to name only ‘Suspicious’ Dealers and not ‘confirmed hawala dealers’. ...

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Investment in Penny Stock- Bogus or Cash Credit U/s. 68?

Income Tax - Now-a-days Income Tax department investigates alleged trading/investment in shares and securities with collusion/connivance with any listed companies or with share broker by conducting Search/ Survey or by asking details u/s 133(6) of the Income Tax Act 1961....

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Bogus Purchases: Addition solely based on sales-tax dept. info not sustainable

Income Tax - ITAT Mumbai held in the case of Hiralal Chunilal Jain vs. ITO that addition for alleged Bogus Purchase not sustainable as AO had made the addition solely on the basis of information received from the Sales tax department without making any independent inquiry or following the principles of natural justice before making the addition. ...

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Why is Maharashtra States Businessmen’s mood OFF? It’s due to issues of MVAT SETOFF.

Income Tax - Businessmen of Maharashtra State are facing a question, whether they should purchase goods from Maharashtra or not? It seems that due to provisions of MVAT Setoff carrying out business in Maharashtra has become difficult....

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VAT Authorities denying Input tax credit on Flimsy Grounds

Income Tax - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in Denial to grant Input tax credit on Flimsy Grounds by the VAT Authorities without following the settled law laid down by Hon’ble Supreme Court of India and by the High Courts. Every Registered Dealer is the agent of Department of Excise [&he...

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Availment of Cenvat Credit Based on Bogus Invoices of Car Dealers by Insurance Companies

Income Tax - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in Chennai Zonal Unit of the Directorate General of Central Excise Intelligence Conducts Investigation under Summons Against 16 Insurance Companies Engaged in Providing Motor-Vehicle Insurance Policies, for Wrongly Availing Cenvat Credit to the T...

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Delhi VAT Dealers – Caution in Purchases against Tax Invoices

Income Tax - Buy goods from a trusted seller who files return and thereby pays due tax collected from you. Mere 2B statement filing by selling dealer not sufficient – selling dealer needs to back it up with return....

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Punjab State Excise and Taxation department unearthed bogus sale of 656 crore

Income Tax - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in In the biggest tax evasion fraud of this financial year, the State Excise and Taxation department has unearthed a bogus billing scam to the tune of Rs 656.71 crore by three renowned Ludhiana firms — Singhania International, Shree Vallabh Exp...

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Purchases cannot be treated as bogus merely based on info from sales-tax dept. or non-reply of 133(6) notices or non-production of suppliers

M/s. Geolife Organics Vs ACIT –23(2) (ITAT Mumbai) - Merely relying upon the information from the Sales Tax Department or the fact that parties were not produced the Assessing Officer could not have treated the purchases as bogus and made addition. ...

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Non-appearance of supplier cannot be the sole basis to terms purchase as bogus

M/s Beauty Tax Vs DCIT, ((ITAT Jaipur) - Non-appearance of the supplier in absence of any other corroborate evidence cannot be sole basis to justify the stand of the Revenue that a transaction of purchase is bogus...

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Defect in notice u/s 274 do not vitiates penalty proceedings; Addition for Bogus purchases U/s. 69C?

Earth moving Equipment Service Corporation Vs Deputy Commissioner Of Income Tax (ITAT Mumbai) - Mere defect in the notice u/s 274 do not vitiates the penalty proceedings and no prejudice was caused to the assessee by non- marking of appropriate clause. Addition for Bogus purchases cannot be made under Section 69C as 'unexplained expenditure' if purchase are duly disclosed and payments are m...

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Bogus share capital: Source of source relevant even for period before amendment to section 68

Pragati Financial Management Pvt. Ltd Vs CIT (Calcutta High Court) - Main thrust of the appellant’s case is that the provisions of Section 68 of the Act as amended could not be given retrospective operation and if that position of law was accepted, then it was not open to the C.I.T. to direct an enquiry to ascertain the source and genuineness of the sums being proj...

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Purchase cannot be termed bogus for mere non-appearance of supplier

M/s Beauty Tax Vs DCIT, ((ITAT Jaipur) - Merely non-appearance of the supplier in absence of any other corroborate evidence cannot be a basis to justify the stand of the Revenue that the transaction of purchase is bogus. ...

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Consider Info related to Penny Stock in Scrutiny Assessment: CBDT

F.No.287/30/2014-IT (inv. II)-Vol-III - (16/03/2016) - Assessing Officer to ensure that information available in the 'Penny Stock' functionality which may be useful for the purpose of cases presently under scrutiny, is examined and considered while finalizing assessments and considering reopening of cases u/s 148 of the IT Act, 1961. ...

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Recent Posts in "Bogus purchases"

Purchases cannot be treated as bogus merely based on info from sales-tax dept. or non-reply of 133(6) notices or non-production of suppliers

M/s. Geolife Organics Vs ACIT –23(2) (ITAT Mumbai)

Merely relying upon the information from the Sales Tax Department or the fact that parties were not produced the Assessing Officer could not have treated the purchases as bogus and made addition. ...

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Non-appearance of supplier cannot be the sole basis to terms purchase as bogus

M/s Beauty Tax Vs DCIT, ((ITAT Jaipur)

Non-appearance of the supplier in absence of any other corroborate evidence cannot be sole basis to justify the stand of the Revenue that a transaction of purchase is bogus...

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Defect in notice u/s 274 do not vitiates penalty proceedings; Addition for Bogus purchases U/s. 69C?

Earth moving Equipment Service Corporation Vs Deputy Commissioner Of Income Tax (ITAT Mumbai)

Mere defect in the notice u/s 274 do not vitiates the penalty proceedings and no prejudice was caused to the assessee by non- marking of appropriate clause. Addition for Bogus purchases cannot be made under Section 69C as 'unexplained expenditure' if purchase are duly disclosed and payments are made through banking channels. The fact t...

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Bogus share capital: Source of source relevant even for period before amendment to section 68

Pragati Financial Management Pvt. Ltd Vs CIT (Calcutta High Court)

Main thrust of the appellant’s case is that the provisions of Section 68 of the Act as amended could not be given retrospective operation and if that position of law was accepted, then it was not open to the C.I.T. to direct an enquiry to ascertain the source and genuineness of the sums being projected by the appellants as capital recei...

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Purchase cannot be termed bogus for mere non-appearance of supplier

M/s Beauty Tax Vs DCIT, ((ITAT Jaipur)

Merely non-appearance of the supplier in absence of any other corroborate evidence cannot be a basis to justify the stand of the Revenue that the transaction of purchase is bogus. ...

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Purchase cannot be held bogus for Mere Non-Appearance of Supplier

M/s Beauty Tax Vs DCIT (ITAT Jaipur)

Merely non-appearance of the supplier in absence of any other corroborate evidence cannot be a basis to justify the stand of the Revenue that the transaction of purchase is bogus....

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Bogus Purchases: GP estimate should be fair, honest and rational

M/s Ratnagiri Stainless Pvt. Ltd. Vs Income Tax Of f icer 5(3) (1) , (ITAT Mumbai)

GP ratio needs to be estimated which definitely involved some estimation/guess work but the said estimation/guess work should be fair, honest and rational keeping in view factual matrix of the case and cannot be arbitrarily applied at the discretion of authorities. ...

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Failure to provide opportunity of cross-examination vitiates assessment proceedings

Shri Sunil Prakash Vs ACIT (ITAT Mumbai)

It is very strange that FAA,being a judicial authority,has held that non providing opportunity of cross examination would not vitiate the assessment proceedings.If the AO/assessee wants to rely upon the statements of someone it is their duty to prove the truthfulness of such statements. ...

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Purchase not Bogus for dealing with traders declared as hawala dealers by sales tax department

DCIT Vs M/s. Allied Blenders and Distillers Pvt. Ltd. (ITAT Mumbai)

ITAT held that purchases cannot be treated as bogus merely on the basis of assessee’s dealing with parties who were found out to be hawala dealers by the sales tax department....

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Mere thin trade and unusually high gain not sufficient to treat the Long Term Capital Gain on Shares as bogus

Dolarrai Hemani Vs ITO (ITAT Kolkata)

ITAT held that when purchase and sale of shares were supported by proper contract notes , deliveries of shares were received through demat accounts maintained with various agencies, the shares were purchased and sold through recognized broker and the sale considerations were received by account payee cheques, the transactions cannot be tr...

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