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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Bail granted to Youth accused of Evading GST by bogus invoices

Income Tax - In a recent judgment, the High Court of Punjab & Haryana, in case of Abhishek Modgil Vs State of U.T. Chandigarh, dated June 12, 2020, granted anticipatory bail to 24 years young boy accused on account of committing an offence of tax evasion to the tune of Rs. 4,02,00,136 by generating bogus invoices of sales and […]...

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Assessment of Bogus Purchases

Income Tax - Surinder Jit Singh Chief Commissioner of Income Tax-3, New Delhi [email protected] Surinder Jit Singh is graduate in Mechanical Engineering from Punjab Engineering College in 1981 and joined Income Tax Department in 1984 as an IRS officer and has worked at Chandigarh, Ludhiana, Pune, Bombay, Amritsar and at Delhi in various capacities ...

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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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GST Council Law Committee to meet & discuss fake invoices on Nov 18

Income Tax - An urgent meeting of the Law Committee of the Goods and Service Tax (GST) Council has been convened tomorrow in New Delhi to discuss in detail the issue of fake invoices to claim input tax credit under the indirect tax regime. The meet will deliberate on ways of further tightening of the GST registration process […]...

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Anti Evasion wing of CGST Delhi detects tax evasion of Rs. 38.05 crores

Income Tax - Anti Evasion wing of CGST Delhi has detected a case of Input Tax credit fraud through fake invoices issued by bogus firms. Investigations led to discovering the accused had also been generating bogus e-way bills to back the fake invoices....

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DGGI, Gurugram, busts racket issuing fake GST invoices of more than Rs 136 Crores

Income Tax - irectorate General of GST Intelligence (DGGI), Gurugram Zonal Unit, Gurugram arrested Sh. Rajiv Gupta on 23.10.2019, partner in M/s RST Batteries, Mundka Delhi and Director of M/s RST Batteries Pvt. Ltd Bahadurgarh, Haryana for orchestrating a racket involving fake invoices valued at more than Rs 136 crores thereby defrauding the Governme...

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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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ITAT upheld disallowance to 12.5% of non-genuine purchases

ITO v. Raj Tools Centre PAP (ITAT Mumbai) - ITO v. Raj Tools Centre PAP (ITAT Mumbai) Appeals is against addition of ₹.2,60,603/-, as unexplained expenditure u/s 69C of the Act. As per the investigations carried out by the Sales Tax Authorities, the aforementioned parties were found to be involved in giving accommodation entries only withou...

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Bogus Purchases: Only GP can be added as undisclosed income

Parnami Pump & Projects Pvt. Ltd. Vs DCIT (ITAT Delhi) - Parnami Pump & Projects Pvt. Ltd. Vs DCIT (ITAT Delhi) Bogus Purchases Cannot Be Wholly Disallowed Without Disallowing Sales Only Gross Profit (GP) Rate Should Be Added as Undisclosed Income We find that the Assessing Officer had issued summons u/s.131 to the proprietor of the said entity from w...

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ITAT restricts addition to 5% of alleged non-genuine purchases

ACIT Vs Rishab Steel House (ITAT Mumbai) - ACIT Vs Rishab Steel House (ITAT Mumbai) Since, Ld.CIT(A) followed the order of the Tribunal in assessee’s own case for the earlier as well as subsequent assessment years on identical issue and decided partly in favour of the assessee by directing the Assessing Officer to estimate the profit eleme...

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Section 69: Entire purchases cannot be added as bogus

ITO Vs Abhay Kantilal Shah (ITAT Mumbai) - ITO Vs Abhay Kantilal Shah (ITAT Mumbai) In instant case, as mentioned earlier, the assessee has filed before the AO copies of (i) bank statements for the financial year 2010­11, evidencing the payments made to these parties; (ii) ledger account of all the parties; (iii) purchase invoices from thes...

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Bogus Iron & steel Purchase : ITAT restricts addition to 4%

M/s Pavapuri Metals & Tubes Vs ITO (ITAT Mumbai) - M/s Pavapuri Metals & Tubes Vs ITO (ITAT Mumbai) It is not in dispute that sales have been accepted as genuine from out of these purchases. When the sales have been accepted as genuine the entire purchases cannot be treated as non-genuine. The Hon’ble Gujarat High Court in the case of Bhol...

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Measures recommended by GST Council to curb fake dealers/invoice rackets

NA - (23/12/2020) - Measures recommended by GST Council to curb fake dealers/invoice rackets notified - In-Person Verification Must For GST Registration. Identification of bogus dealers through data analytics and suspension. Mandatory 1% GST payment for those risky dealers and fly-by-night operators who show unusual la...

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DGGI, Mumbai, arrests 2 persons in fictitious ITC case

Release ID: 1672299 - (12/11/2020) - Mumbai Zonal Unit of the Directorate General of GST Intelligence, CBIC has arrested Mr. Sunil Ratnakar Gutte, Director of M/s. Sunil Hitech Engineering Ltd., on charges of having fraudulently availed, utilized, as well as passed on fictitious Input Tax Credit, today, 12th November 2020....

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I-T Dept busts a major racket of bogus billing & hawala transactions

NA - (11/11/2019) - Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, 11th November, 2019 PRESS RELEASE Income Tax Department busts a major racket of bogus billing & hawala transactions Income Tax Department carried out searches in the first week of November, 201...

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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"

ITAT upheld disallowance to 12.5% of non-genuine purchases

ITO v. Raj Tools Centre PAP (ITAT Mumbai)01/01/1970

ITO v. Raj Tools Centre PAP (ITAT Mumbai) Appeals is against addition of ₹.2,60,603/-, as unexplained expenditure u/s 69C of the Act. As per the investigations carried out by the Sales Tax Authorities, the aforementioned parties were found to be involved in giving accommodation entries only without actually supplying the goods. The logi...

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Bogus Purchases: Only GP can be added as undisclosed income

Parnami Pump & Projects Pvt. Ltd. Vs DCIT (ITAT Delhi)01/01/1970

Parnami Pump & Projects Pvt. Ltd. Vs DCIT (ITAT Delhi) Bogus Purchases Cannot Be Wholly Disallowed Without Disallowing Sales Only Gross Profit (GP) Rate Should Be Added as Undisclosed Income We find that the Assessing Officer had issued summons u/s.131 to the proprietor of the said entity from whom assessee has made purchases, but tha...

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ITAT restricts addition to 5% of alleged non-genuine purchases

ACIT Vs Rishab Steel House (ITAT Mumbai)01/01/1970

ACIT Vs Rishab Steel House (ITAT Mumbai) Since, Ld.CIT(A) followed the order of the Tribunal in assessee’s own case for the earlier as well as subsequent assessment years on identical issue and decided partly in favour of the assessee by directing the Assessing Officer to estimate the profit element in alleged non-genuine purchases at 5...

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Section 69: Entire purchases cannot be added as bogus

ITO Vs Abhay Kantilal Shah (ITAT Mumbai)01/01/1970

ITO Vs Abhay Kantilal Shah (ITAT Mumbai) In instant case, as mentioned earlier, the assessee has filed before the AO copies of (i) bank statements for the financial year 2010­11, evidencing the payments made to these parties; (ii) ledger account of all the parties; (iii) purchase invoices from these parties and (iv) sale invoices as [&he...

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Measures recommended by GST Council to curb fake dealers/invoice rackets

NA 23/12/2020

Measures recommended by GST Council to curb fake dealers/invoice rackets notified - In-Person Verification Must For GST Registration. Identification of bogus dealers through data analytics and suspension. Mandatory 1% GST payment for those risky dealers and fly-by-night operators who show unusual large turnovers and have no financial cred...

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Bogus Iron & steel Purchase : ITAT restricts addition to 4%

M/s Pavapuri Metals & Tubes Vs ITO (ITAT Mumbai)01/01/1970

M/s Pavapuri Metals & Tubes Vs ITO (ITAT Mumbai) It is not in dispute that sales have been accepted as genuine from out of these purchases. When the sales have been accepted as genuine the entire purchases cannot be treated as non-genuine. The Hon’ble Gujarat High Court in the case of Bholanath Polyfab Pvt. Ltd […]...

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ITAT Restricts addition for Bogus Bills at 5% of bogus purchases

Suresh Mehta HUF Vs ITO (ITAT Mumbai)01/01/1970

The issue under consideration is whether the CIT(A) is correct in confirming the addition made by AO for non-genuine and bogus purchases by applying profit rate at the rate of 12.5% of the bogus purchases?...

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GST Council Law Committee to meet & discuss fake invoices on Nov 18

01/01/1970

An urgent meeting of the Law Committee of the Goods and Service Tax (GST) Council has been convened tomorrow in New Delhi to discuss in detail the issue of fake invoices to claim input tax credit under the indirect tax regime. The meet will deliberate on ways of further tightening of the GST registration process […]...

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Posted Under: Income Tax |

DGGI, Mumbai, arrests 2 persons in fictitious ITC case

Release ID: 1672299 12/11/2020

Mumbai Zonal Unit of the Directorate General of GST Intelligence, CBIC has arrested Mr. Sunil Ratnakar Gutte, Director of M/s. Sunil Hitech Engineering Ltd., on charges of having fraudulently availed, utilized, as well as passed on fictitious Input Tax Credit, today, 12th November 2020....

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ITAT Restricted Addition made by AO to 2% of Bogus Purchases

Surana Enterprises Vs ITO (ITAT Delhi)01/01/1970

Surana Enterprises Vs ITO (ITAT Delhi) The issue under consideration is whether the addition made by AO u/s 69C by considering the purchases as Bogus Purchase is justified in law? ITAT states that, in present case, the assessee has shown sales of the goods, or otherwise the goods are lying in the closing stock. If […]...

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