Bogus purchases

Assessment of Bogus Purchases

Income Tax - Surinder Jit Singh Chief Commissioner of Income Tax-3, New Delhi sjsingh59@gmail.com 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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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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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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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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Addition for bogus purchase only to the extent of lower GP declared

Omkar Metal & Alloys Corporation Vs ITO (ITAT Mumbai) - Addition in case of bogus purchases was required to be made only to the extent of lower GP declared by assessee on bogus purchases as compared to G.P. on normal purchases. Thus, no addition was warranted in case of assessee as GROSS PROFIT declared by assessee in respect of alleged bogus purchases w...

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Bogus Purchase- Addition should be on the basis of GP of assessee

Dharmendra N. Zaveri Vs ACIT (ITAT Mumbai) - Hon’ble Court has held that the addition has to be made on the basis of GP of the assessee. Accordingly, ITAT set aside the order of CIT(A) and direct the AO to apply a rate of 3% on the bogus purchases....

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Entire purchases cannot be disallowed as Bogus If AO accepted sales

PCIT Vs Rishabhdev Tachnocable Ltd. (Bombay High Court) - It was held that whether the purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. When the Tribunal had concluded that the assessee did make the purchase, as a natural corollary not the entire amount covered by such p...

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Bogus purchases- Entire Purchase amount cannot be disallowed

The Principal Commissioner of Income Tax-25 Vs Pinaki D. Panani (Bombay High Court) - Pr. CIT Vs Pinaki D. Panani (Bombay High Court) Even if the purchases made from the parties in question are to be treated as bogus, it does not necessarily mean that entire amount should be disallowed and that no benefit should be given to the Respondent-Assessee. Assuming that the purchasers from w...

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Addition only for difference of GP on Normal & Bogus Purchase

Hemant M Mehta HUF Vs ACIT (ITAT Mumbai) - Hemant M Mehta HUF Vs A.C.I.T. (ITAT Mumbai) In case of bogus purchases where sales are accepted, the addition is required to be made only to the extent of difference between the GP declared by the assessee on normal purchases vis a vis bogus purchases. Respectfully following the order of the Hon’...

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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"

Addition for bogus purchase only to the extent of lower GP declared

Omkar Metal & Alloys Corporation Vs ITO (ITAT Mumbai)

Addition in case of bogus purchases was required to be made only to the extent of lower GP declared by assessee on bogus purchases as compared to G.P. on normal purchases. Thus, no addition was warranted in case of assessee as GROSS PROFIT declared by assessee in respect of alleged bogus purchases was more than the GROSS PROFIT declared i...

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Bogus Purchase- Addition should be on the basis of GP of assessee

Dharmendra N. Zaveri Vs ACIT (ITAT Mumbai)

Hon’ble Court has held that the addition has to be made on the basis of GP of the assessee. Accordingly, ITAT set aside the order of CIT(A) and direct the AO to apply a rate of 3% on the bogus purchases....

Read More

Entire purchases cannot be disallowed as Bogus If AO accepted sales

PCIT Vs Rishabhdev Tachnocable Ltd. (Bombay High Court)

It was held that whether the purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. When the Tribunal had concluded that the assessee did make the purchase, as a natural corollary not the entire amount covered by such purchase but the profit element embedded ...

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

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....

Read More

Bogus purchases- Entire Purchase amount cannot be disallowed

The Principal Commissioner of Income Tax-25 Vs Pinaki D. Panani (Bombay High Court)

Pr. CIT Vs Pinaki D. Panani (Bombay High Court) Even if the purchases made from the parties in question are to be treated as bogus, it does not necessarily mean that entire amount should be disallowed and that no benefit should be given to the Respondent-Assessee. Assuming that the purchasers from whom the purchases were […]...

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Addition only for difference of GP on Normal & Bogus Purchase

Hemant M Mehta HUF Vs ACIT (ITAT Mumbai)

Hemant M Mehta HUF Vs A.C.I.T. (ITAT Mumbai) In case of bogus purchases where sales are accepted, the addition is required to be made only to the extent of difference between the GP declared by the assessee on normal purchases vis a vis bogus purchases. Respectfully following the order of the Hon’ble Jurisdictional High Court […]...

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Bogus invoices without actual movement of goods- HC denies Bail

Mukat Behari Sharma Vs Union of India (Rajasthan High Court)

Learned counsel for the Union of India has opposed the petition and has submitted that the offence committed by the accused is serious in nature. In-fact, the accused had issued bogus invoices without actual movement of goods which led to involvement of fraudulent input taxes amounting to Rs.40.58 crores. Admittedly, company has deposited...

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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, 2019 on a group of persons indulging in iss...

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Disallowance cannot be made solely on third party information- Section 68/69

CIT Vs Ms Odeon Builders Pvt. Ltd. (Supreme Court)

The entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who ...

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

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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