The appellate court affirmed the Tribunal's decision to reduce bogus purchase additions and emphasized adherence to prior judicial rulings as decisive in tax matters.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned Senior Standing Counsel Mr. Karan Sanghani for the appellant.

2. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short’ the Act’) raising the following questions of law arising out of the judgment and order dated 1.4.2024 passed by the Income Tax Appellate Tribunal, Surat (for short ‘the Tribunal’) in ITA No.45/SRT/2024 for the Assessment Year 2013-14:

“(i) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has justified in dismissing the appeal of the Revenue against the decision of the Ld CIT(A) in restricting the addition made by the AO at the rate of 100% of bogus purchases amounting to Rs. 225,29,05,048/- to 6% of the bogus purchases, ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Bhanwarlal Jain Group companies which were engaged in providing accommodation entries?

(ii) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has justified in dismissing the appeal of the Revenue, relying upon the decision of Co-ordinate Bench in the case of Pankaj J Chaudhary in ITA No. 1379/AHD/2017?

(iii) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is correct in not considering that the amount claimed as payment to hawala dealers was in effect suppression of profits by obtaining bogus purchase bills which was liable to be added to the income of the Assessee?

(iv) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in not considering:

 the judgment of Gujarat High Court in the case of N.K. Industries Ltd. vs. DCIT in TA No. 240 to 242 of 2003 which has been upheld by the Hon'ble Apex Court in Special Leave to Appeal No. 769 of 2017 dated 16.01.2017, wherein the Hon'ble High Court decided that 100% purchases from bogus parties was liable to be added in the hands of the Assessee, reversing the order passed by the Hon'ble ITAT that restricted addition to 25%, holding that such restriction goes against the principles of Sections 68 and 69C of Income tax Act?

 the judgment of Calcutta High Court in the case of PCIT vs. Premlata Tekriwal, 143 taxmann.com 173 involving similar issue of purchase of bogus concern to suppress profits wherein the court held that "since it was established that expenditure was unexplained/bogus, entire amount of bogus expenditure was to be added to income of Assessee"?

 the ratio of judgement of Hon'ble Apex Court on the issue of unexplained expenditure (bogus purchase) in the case of N.K. Proteins v. Dy. CIT, [2017] 84 taxmann.com 195/250 Taxman 22 (SC) wherein, the SLP filed by the assessee has been dismissed by the Hon'ble Apex Court

(v) Whether on the facts and circumstance of the case and in law, the Hon'ble ITAT is justified in dismissing the appeal of the revenue wherein the AO has made 100% addition of bogus transaction amounting to Rs. 225,29,05,048/- made by the Assessee with the entry provider not appreciating that non-genuineness of the expenditure booked was established by the information received from DIT(Inv)-II, Mumbai and the Assessee was not able to discharge its onus to establish the genuineness of transaction before the AO as well as before the Ld CIT(A)?”

3. Learned Senior Standing Counsel Mr. Sanghani fairly submitted that the Tribunal passed the common order in ITA No. 43-45/SRT/2024 for Assessment Year 2011-12 to Assessment Year 2013-14 in the case of respondent-assessee. It was submitted that this Court by order dated 20.9.2024 for the Assessment Year 2011-12 dismissed the Tax Appeal No. 970 of 2024 preferred by the Appellant-Revenue in case of the respondent assessee. It was, therefore, submitted that same order may be passed in this appeal also.

4. Considering the