Income Tax : The issue concerns how purchase classification affects tax treatment. The key takeaway is that bogus purchases lead to full disall...
Income Tax : Courts have clarified that purchases cannot be disallowed without proper evidence. Genuine transactions supported by documents can...
Income Tax : ITAT held that section 69 cannot be invoked where purchases are duly recorded in books and paid through banking channels, making t...
Income Tax : The Tribunal held that purchases cannot be fully disallowed merely on suspicion and supplier deficiencies. The issue was remanded ...
Income Tax : bogus purchases is a arisen, there has not been a consistent approach of different courts, as facts are not found similar in such ...
Goods and Services Tax : DGGI in Gurugram has successfully dismantled a massive network of fake entities involved in fraudulent tax practices. The operatio...
Goods and Services Tax : DGGI Gurugram unmasked an Input Tax Credit fraud operation with 461 shell entities, causing a loss of Rs. 863 crore to exchequer....
Goods and Services Tax : CGST Navi Mumbai arrests one person for availing and passing on fake ITC on bogus invoices On 18th August 2022, the Proprietor/ma...
Goods and Services Tax : CGST Bhiwandi Commissionerate arrests two persons for availing and passing on fake ITC on bogus invoices of Rs. 55 crore Officers ...
Income Tax : Income Tax Department conducts search operations in West Bengal The Income Tax Department initiated search operation in the case o...
Income Tax : Bombay High Court held penalty under Section 271(1)(c) cannot survive where bogus purchase addition is sustained only on an estima...
Income Tax : ITAT held that where sales are accepted, the entire purchase amount cannot be added. The addition was restricted to 8% as the embe...
Income Tax : The High Court declined to examine bogus purchase issues after holding the Revenue's appeal not maintainable due to low tax effect...
Income Tax : The Gujarat High Court upheld the Tribunal's estimation of 6% on disputed purchases, holding that concurrent findings of fact warr...
Income Tax : The Gujarat High Court held that the Assessing Officer relied only on information from the Maharashtra Sales Tax Department withou...
Goods and Services Tax : The Ministry of Finance, Government of India, recently released Instruction No. 03/2023-GST, dated 14th June, 2023, outlining stri...
Goods and Services Tax : Government of India has noticed instances of fake GST registrations and issuance of bogus invoices leading to revenue loss. A meet...
Goods and Services Tax : Instructions to ensure careful handling of registration, cancellation, and revocation of registration processes for fake taxpayers...
Goods and Services Tax : Our experience shows that the bill traders after getting registrations, issue invoices without supply of goods or services for hug...
Goods and Services Tax : Assessment of return non-filers u/s 62 is done as a measure to ensure filing of return. However, the taxpayers are' detected as no...
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 […]
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.
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 purchase […]
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 […]
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.
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 paused before us was, was the Tribunal justified in adopting the gross profit rate of 8% as against 25% adopted by the Commissioner (Appeals)?
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 disallowance should be restricted to 12.5% of the bogus purchases.
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 precondition for invoking s. 69C is that the expenditure incurred by the assessee should be out of books of accounts
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 addition is restricted to 2% of the bogus purchase
The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee.
