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 - 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 & Taxation as while granting the registration, every registered dealer is authorized to collect [...

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

Income Tax - 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 Tune of Rs. 1200-2500 Crore on the Bogus Invoices of the Car Dealers....

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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 - 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 Exports and Krishna Ispat Limited. As per investigations, the firms — all of which deal in [&helli...

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Bogus LTCG from Penny stocks- ITAT Confirms Addition for failure to explain Jump in Price

Sanjay Bimalchand Jain Vs Pr CIT (Bombay High Court) - By this income tax appeal, the appellant ­assessee challenges the orders of the Assessing Officer, the Commissioner of Income Tax as also the Income Tax Appellate Tribunal holding that the assessee had traded in shares and the income was liable to be taxed as business income....

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Accommodation entries: AO cannot make addition without showing that explanation of Assessee is not satisfactory or incorrect

ITO Vs. Shreedham Construction Pvt Ltd (ITAT Mumbai) - ITO Vs. Shreedham Construction Pvt Ltd (ITAT Mumbai) Section 68 casts the initial burden of proof on the assesse to show prima facie and to explain the nature and source of credit found in its When the statute places the burden of proof in income tax cases on the tax payer, it is understood to [&hel...

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Share transaction via stock exchange evidenced by broker’s note not Bogus unless revenue prove otherwise

Sri Lal A. Khemani Vs. The Income Tax Officer (ITAT Hyderabad) - Sri Lal A. Khemani Vs. ITO (ITAT Hyderabad) There is no dispute that assessee had purchased shares through stock exchange as evidenced by the broker’s note and also sold through stock exchange by way of another broker’s note. Both of which contain the transaction details, time of transaction alo...

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Violation of SEBI regulations by broker would not make assessee’s share transactions bogus

ITO Vs. M/s Arvind Kumar Jain HUF (ITAT Mumbai) - It was held that where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income u/s 68....

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Bogus purchases: Assessee Failed to prove existence of parties, ITAT estimated net profit at 12.5%

Dy. CIT Vs. Fagioli India (P) Ltd. (ITAT Mumbai) - Dy. CIT Vs. Fagioli India (P) Ltd. (ITAT Mumbai) In this case assessing officers main allegation is that  two parties from whom appellant made purchases are involved in providing accommodation entries as per the list published by Maharashtra Sales Tax Department. On the other hand, assessee has fur...

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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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Bogus purchases’s Popular Posts

Recent Posts in "Bogus purchases"

Bogus LTCG from Penny stocks- ITAT Confirms Addition for failure to explain Jump in Price

Sanjay Bimalchand Jain Vs Pr CIT (Bombay High Court)

By this income tax appeal, the appellant ­assessee challenges the orders of the Assessing Officer, the Commissioner of Income Tax as also the Income Tax Appellate Tribunal holding that the assessee had traded in shares and the income was liable to be taxed as business income....

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Accommodation entries: AO cannot make addition without showing that explanation of Assessee is not satisfactory or incorrect

ITO Vs. Shreedham Construction Pvt Ltd (ITAT Mumbai)

ITO Vs. Shreedham Construction Pvt Ltd (ITAT Mumbai) Section 68 casts the initial burden of proof on the assesse to show prima facie and to explain the nature and source of credit found in its When the statute places the burden of proof in income tax cases on the tax payer, it is understood to […]...

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Share transaction via stock exchange evidenced by broker’s note not Bogus unless revenue prove otherwise

Sri Lal A. Khemani Vs. The Income Tax Officer (ITAT Hyderabad)

Sri Lal A. Khemani Vs. ITO (ITAT Hyderabad) There is no dispute that assessee had purchased shares through stock exchange as evidenced by the broker’s note and also sold through stock exchange by way of another broker’s note. Both of which contain the transaction details, time of transaction along with STT paid. There is no […]...

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Violation of SEBI regulations by broker would not make assessee’s share transactions bogus

ITO Vs. M/s Arvind Kumar Jain HUF (ITAT Mumbai)

It was held that where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income u/s 68....

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Bogus purchases: Assessee Failed to prove existence of parties, ITAT estimated net profit at 12.5%

Dy. CIT Vs. Fagioli India (P) Ltd. (ITAT Mumbai)

Dy. CIT Vs. Fagioli India (P) Ltd. (ITAT Mumbai) In this case assessing officers main allegation is that  two parties from whom appellant made purchases are involved in providing accommodation entries as per the list published by Maharashtra Sales Tax Department. On the other hand, assessee has furnished certain evidences in the form of ...

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Capital gain from penny stocks not bogus for violation of SEBI regulations by broker

ITO Vs. Arvind Kumar Jain HUF (ITAT Mumbai)

Where assessee’s broker share transaction was bone fide in all respect, merely because share broker was tainted violating SEBI regulations, would not make assessee’s share transactions bogus....

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Bogus Purchase- Addition by GP rate of 8% on bogus purchases justified

Pr. CIT Vs Jagdish H Patel (Gujarat High Court)

Assessee’s contention that adding the entire amount of bogus purchases would give a completely distorted figure and the gross profit would be higher than the total turnover. Such bogus purchases were for off-setting the purchases from producers and agriculturists directly who would not have the billing facility. Only question seriously ...

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100% addition on bogus purchases cannot be done without doubting sales

Pravin Thanmal Shah HUF Vs. Asst. CIT(A) (ITAT Mumbai)

Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation, in our considered opinion, on the facts and circumstances of the case, 12.5% disallowance out of the bogus purchases meets the end of justice. Accordingly, I hold that the disa...

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AO can not make addition for Bogus Purchase U/s. 69C if all purchase / sales transactions are part of regular books

M/s. Fancy Wear Vs. Income Tax Officer (ITAT Mumbai)

If the AO has not rejected the books of accounts and has only doubted the genuineness of the suppliers but not the genuineness of the purchases and if the payments are made by account payee cheques, s. 69C is not attracted. S. 69C cannot be applied where all purchase and sales transactions are part of regular books of accounts. The basic ...

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Addition for peak balance of bogus purchases not sustainable if AO not disputed genuineness of sales, Stock Register

Asst. CIT 19(3) Vs. M/s. Steel Line (India) (ITAT Mumbai)

Bogus Purchases: If the AO has not disputed the genuineness of sales and the quantitative details and the day to day stock register maintained by the assessee, a trader, he cannot make an addition in respect of peak balance of the bogus purchases. He can only determine the element of profit embedded in the bogus purchases. On facts, the a...

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