The Tax Publishers2020 TaxPub(DT) 1538 (Bom-HC) : (2020) 274 TAXMAN 0052

IN THE BOMBAY HIGH COURT

UJJAL BHUYAN & MILIND N. JADHAV, JJ.

Pr. CIT v. Jakharia Fabric (P) Ltd.

Income Tax Appeal (IT) No. 1354 of 2017

10 February, 2020

Appellant by: Akhileshwar Sharma, Advocate

Respondent by: M. Subramanian i/by V.S. Hadade, Advocate

ORDER

P.C.

1. Heard Mr. Akhileshwar Sharma, learned standing counsel Revenue for the appellant; and Mr. M. Subramanian alongwith Mr. V.S. Hadade, learned counsel for the respondent/assessee.

2. This appeal has been preferred by the Revenue under section 260A of the Income Tax Act, 1961 (briefly 'the Act' hereinafter) against the Order, dated 21-9-2016 passed by the Income Tax Appellate Tribunal, Mumbai Bench 'J', Mumbai ('Tribunal' for short) in Income Tax Appeal No. 6851/Mum/2014 for the assessment year 2010-11.

3. The appeal has been preferred on the following questions stated to be substantial questions of law :--

'(i) Whether on the facts and in the circumstances of the case, Tribunal was correct in law in confirming the order of the Commissioner (Appeals) restricting the disallowance to only 17.5% of the total alleged bogus purchase of Rs. 1,14,92,970 ignoring the fact that the said seller parties were found to be Hawala operators/bogus billers as per findings given by the Sales Tax Department, Government of Maharashtra and the Investigation Wing of the Income Tax Department?

(ii) Whether on the facts and in the circumstances of the case, Tribunal was correct in law in confirming the order of the Commissioner (Appeals) restricting the disallowance to only 17.5% of the total alleged bogus purchase of Rs. 1,14,92,970, ignoring the fact that the assessee had neither filed any documentary evidence nor confirmation for purchase nor produced any evidence in the form of stock register during the course of assessment proceedings to substantiate its claim that the goods claimed to have been purchased from alleged parties were actually consumed/sold?

(iii) Whether on the facts and in the circumstances of the case, Tribunal was correct in law in relying upon the decision of CIT v. Nikunj Eximp Enterprises Pvt. Ltd. (2015) 372 ITR 619 (Bom) : 2015 TaxPub(DT) 1855 (Bom-HC) case ignoring that the facts of the said case are distinguishable from the facts of the present case, as in that case it was held that the material was actually purchased from defence organisation and so cannot be treated as bogus whereas the alleged purchases in the present case is from private parties who are found to be Hawala operators/bogus billers as per the findings given by the Sales Tax Department, Government of Maharashtra?

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