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ITAT upholds Addition of 12.5% for taking Bills without Delivery of Goods
April, 29th 2020

The Income Tax Appellate Tribunal (ITAT) upheld the decision of CIT(A) where 12.5% for taking bills without delivery of goods.

The assessee, Vijay B Shah (HUF) is engaged in the trading of iron and steel. The Assessing Officer has reopened the assessment on getting information regarding assessee taking accommodation purchase bills. The Assessing Officer made inquiries and found that the assessee has taken purchase bills without delivery of goods. Accordingly, he added 12.5% of such alleged purchases in assessee’s income. By the impugned order, the CIT(A) has confirmed the action of the Assessing Officer.


“The fact remains that the AO has not rejected the books of accounts of the appellant nor it is his case that cash was withdrawn from the bank account of the suppliers immediately after the cheques were deposited nor he has brought on record any other material to strengthen his case that the purchases are bogus. However, at the same time, it cannot be denied that the above various parties from whom bogus bills are taken have indeed been declared as hawala parties by the sales tax/VAT Department, since, the Hawala parties in question have been found, to be engaged in providing bogus bills without actually dealing in goods,” the CIT(A) observed.

The tribunal comprises an accountant member R.C. Sharma upheld the decision of CIT(A) were 12.5% for taking bills without delivery of goods and said, “the A.O. upheld addition only to the extent of 12.5% of the alleged bogus purchases and did not disturb the sales. By the impugned order, the ld. CIT(A) after considering various judicial pronouncements on the issue and the facts and circumstances of the case upheld the order of the A.O. after giving detailed findings of the appellate order. Nothing was placed before me so as to persuade me to deviate from the findings recorded by the ld. CIT(A). Accordingly, I do not find any reason to interfere in the order of the ld. CIT(A) and uphold the same.”

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