Saket Impex, Surat V. ACIT, Circle-9, Surat

ITA 512/SRT/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1662 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Bogus purchase; Third party statement; Accommodation entries; Set aside
• Section: 147; 143(3); 143(1); 143(2); 73; 153; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.512/SRT/2019 Assessment Year: (2013-14) (Physical Court Hearing) Saket Impex, C/o. Ashokbhai A. Mangukiya, B-604, Om Heritage Building, Nr. Cancer Hospita, Opp. Barhamanand Building, Dabholi, Surat. Vs. The DCIT, Cirlce-3(3), Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAQFS1516B (Appellant) (Respondent) Assessee by Shri Rasesh Shah, CA Respondent by Shri Anurag Dubey, Sr. DR Date of Hearing 22/07/2022 Date of Pronouncement 20/09/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-3, Surat [in short “the ld. CIT(A)”] in Appeal No. ITBA/APL/S/250/2018-19/1009632308(1), dated 04.04.2018 which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 11.03.2016. 2. Grounds of appeal raised by the assessee are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer in making addition of Rs.1,50,47,690/- on account of bogus purchase by wrongly rejecting books of accounts u/s 145(3) of the Act. 2. It is therefore prayed that addition made by assessing officer may please be deleted. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” Page | 2 512/SRT/2019/AY.2013-14 Saket Impex 3. Facts of the case, which can be stated quite shortly, are as follows: The assessee before us is a partnership firm and filed its return of income on 25.09.2013 declaring total income of Rs.97,92,600/- for AY.2013-14. Later assessee’s return of income was processed u/s 143(1) of the Act. The case was selected for scrutiny through CASS. Notice under section 143(2) of the Act was issued on 03.09.2014 which was duly served upon the assessee on 08.09.2014. The assessee firm is engaged in Manufacturing, Import and Export of Diamonds during the year under consideration. Information was received from the Investigation Wing, Mumbai that Rajendra Jain Sanjay Chaudhary Group and Dharmichand Jain Group on whom search action has been carried out by them have admitted during the search proceedings that they have been providing accommodation entries by way of issuing bogus purchase bills. From the names/details provided during the search proceedings, the following name figures: PAN of Bill Provider Name of Bill Provider Total value of Transaction (Rs.) AAQFS1S16B M/s Nayan Gerns 1,50,47,690 The assessee is a beneficiary of non-genuine transaction of Rs.1,50,47,690/- from the M/s Nayan Gems. During the course of assessment proceedings, books of accounts, bill, vouchers were produced which were examined by Assessing Officer. On verification of the same, it is noticed that quantity-wise and quality- wise details of rough as well as finished goods are not maintained by the assessee. The assessee has not made available to the Assessing Officer the details of carat wise diamonds manufactured and the quantity details of the same. Hence, it is not established as to how much rough is used for manufacturing of diamonds. It is also not verifiable as to how much carat wise diamonds are manufactured. Therefore, the assessee was asked to show cause as to why the purchases made from Nayan Gems of Rs.1,50,47,690/- should not be treated as unverifiable and added to the total income of the assessee. 4. In response, the assessee vide letter dated 08.02.2016 submitted before Assessing Officer as follows: “........ As we are doing the business of trading diamonds. We are doing import and local purchase of rough diamonds and mfg. it and sale of diamonds since Page | 3 512/SRT/2019/AY.2013-14 Saket Impex long. We also purchase polished diamonds from market and sales to our customer. During the year under consideration we purchased the polished diamonds from Nayan Gems on 13.07.2012 & 06.09.2012. They have delivered the goods and issued bills for the same and we have made entry in our books as well as in stock register. And we paid the bills amount by account payee cheque (RTGS) on various date. Moreover above party assessed to tax with PAN: AJBPJ5163F. He also have a VAT and CST register number. The goods purchased by us is reflected in our books. And simple logic is there when there is no purchase, no sales are affected. We have sold the polished so if there is no stock of polished diamond it is not possible to sale the same. As the said party Nayan Gems under what circumstances given a statement that he has only issued bills that we does not know and in his statement what is mentioned that also we do not know. But so far as our is concern we have purchased the goods from above party and make payment by account payee cheque (RIGS) and the goods is recorded in our books. We attach herewith the copy of bills of above party and copy of account from his books. The bank statement already given to you in which the payment are reflected. Under the circumstances we have proved genuineness of the purchase, the party PAN and VAT/CST No. and payment made. So there is no question to add any amount considering the purchase is bogus one in this connection we also rely the following case laws. 1) Milk Food Ltd. vs Dy.CIT 65 TTJ 848 2) I.T.O. vs Sunsteel 92 TT) 1126 3) J.R. Solvant Industries (P) Ltd. vs A.C.1.T, 63 TTJ 165/68ITD 65 4) Balaji Textiles Industries Ltd. vs. ITO 49 ITD 177 5) CIT VS. M.K. Bros. 163 ITR 249 6) Shri Ram -Mufti tech Ltd. v/s ACJT 92 TTJ 568 5. However, Assessing Officer rejected the contention of the assessee and held that assessee is in the business of manufacturing and polishing of diamonds. The rough diamonds are of different quality, size; colour i.e. rough diamonds are available of 5 dollar and 500 dollar and of different carats. The assessee purchases rough diamond and polishes the same by his in-house diamond workers and also gets the diamond polished on job work basis. Further the rough diamond after getting polished becomes a finished product of higher quality or inferior quality. It all depends upon the quality of rough diamond, i.e. cut, carat, colour and clarity. Further, latest technology of laser is used to determine the quality of diamonds I.e. Page | 4 512/SRT/2019/AY.2013-14 Saket Impex size and weight of polished diamonds. Hence, assessee is in full control of the affairs of the manufacturing activity i.e. from purchasing of rough diamonds to finished product of diamond. And to have full control and maximize profits, the assessee has to keep quality-wise quantity details. In absence of such control, the assessee may not be able to maximize the profits and may incur losses. In such circumstances, it is obvious that the assessee is maintaining such details but does not want to make available such details before the Department. The reason for not making available such details is also obvious i.e. to conceal the actual production and suppress the production. The assessee is deliberately not making available quality-wise quantity details in order to show less profit and consequently pay less tax. In order to suppress the production the assessee has shown bogus purchases of Rs.1,50,47,690/- from Nayan Gems who is in the business of providing accommodation entries. The provisions of s. 145(3) of the IT Act are clearly applicable in case of assessee as the assessee has failed to establish the genuineness of the purchase of Rs.1,50,47,690/-. The assessee has failed to prove the genuineness of the aforesaid purchases by not producing the suppliers in spite of repeated opportunities granted. Books of accounts are not genuine in view of various infirmities detected as discussed above. 6. Also assessee could not produce the books of accounts along with original copy of jhangad of delivery of rough diamonds and jhangad of polished diamonds. Day to day Quantitative and Qualitative details are not maintained so as to verify the purchase and sale in quantity and value. Non-production of jhangad and quantitative records combined with deficiencies as pointed out in the foregoing paragraph establish that the books of accounts are not genuine and not reliable. 7. Therefore, Assessing Officer held that the assessee has squarely failed to prove that the so called purchase from the above party is genuine and reliable. From this, it is very clear that the books result of the assessee is not reliable and is susceptible for the manipulation at the will and wish of the assessee. In view of the above, Books of accounts of the assessee is rejected u/s 145(3) of the IT, Act by the Assessing Officer. In view of the aforesaid facts, material and evidence existing on records, the Assessing Officer held that transactions in respect of Page | 5 512/SRT/2019/AY.2013-14 Saket Impex goods shown as purchased by the assessee from the party Mayur Exports and Mahataxmi Gems Pvt. Ltd. of Rs.1,50,47,690/- is not genuine transactions. It is reasonably clear and glaringly obvious that it is a bogus party, the sales invoices claimed to have been issued by it are fictitious one and the cash deposit in the bank account subsequent to the clearance of cheque in the names of the above party shows the way by which the assessee could accommodate these fictitious transactions in respect of goods shown as purchased from such bogus supplier. In view of the above, a sum of Rs.1,50,47,690/- being bogus purchases from Nayan Gems as mentioned above, was held to be the income from unverifiable purchases of the assessee and added back to the total income of the assessee. 8. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the addition made by the Assessing Officer. 9. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before us. 10. The Ld. Counsel for the assessee submitted before us the following documents: (i) Acknowledgment of Return of Income and computation of Total income (vide paper book page nos. 11 to 14). (ii) Audit Report along with audited financial statements (vide paper book page nos. 18 to 49) (iii) Date wise Polished Diamond Stock Book for the financial year 2012-13 – Surat Branch (vide paper book page nos. 50 to 53) (iv) Date wise Polished Diamond Stock Book for the financial year 2012-13 – Mumbai Branch (vide paper book page nos. 54 to 56) (v) Invoices for purchases from Nayan Gems (vide paper book page nos. 57 to 58) (vi) Contra Confirmation of account – Nayan Gems (vide paper book page no. 58) (vii) Relevant Bank Statement of assessee evidencing payment of purchase (vide paper book page nos. 60 to 64) Page | 6 512/SRT/2019/AY.2013-14 Saket Impex (viii) Details of purchase projecting purchases from Nayan Gems and other parties (vide paper books page no. 65). Based on the above noted documents, the Ld. Counsel claimed that purchases made by the assessee are genuine. Apart from this the Ld. Counsel for the assessee also relied on the following judgments: (i) ITO vs Totaram B. Sharma [Tax Appeal No.1344 of 2008 & 1355 of 2008 (Guj. HC)] (vide paper book page nos. 166 to 171) (ii) DCIT vs Adinath Industires – (2001) 252 ITR 476 (Guj. HC) (vide paper book page no. 172) (iii) M/s. Rosy Blue (India) Pvt. Ltd. vs DCIT [ITA No.1724/MUM/2019] (vide paper book page nos. 173 to 183) 11. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 12. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that issue under consideration belongs to bogus purchases and in case of Rajendra Jain Group, Sanjay Chaudhary Group and Dharmichand Jain Group, the co-ordinate Bench of this Tribunal has taken a view in case of Pankaj K. Chaudhary, in ITA No. 1152/AHD/2017, dated 27.09.2021 that addition @6% of bogus purchase are quite reasonable. The findings of the co-ordinate Bench are as follows: “12. We have heard the submission of ld.CIT-DR for the Revenue and the ld. Authorised Representative (AR) of the assessee. We have also gone through the various documentary evidences furnished by assessee. The ld. CIT-DR for the Revenue supported the order of AO. The ld. CIT-DR submits that Investigation Wing, Mumbai made a search on Bhanwarlal Jain Group. During the search and after search, the Investigation Wing made a thorough investigation and concluded that Bhanwarlal Jain Group and his associates including his sons were indulging in managing about 70 benami concerns. The benami concerns were engaged in providing accommodation entries. The assessee is one of the beneficiaries of such accommodation entries. In the transaction of accommodation entries, the documentary evidences are created in such a way, so that the bogus transaction is Page | 7 512/SRT/2019/AY.2013-14 Saket Impex looks like genuine transaction. In bogus transaction, the fabricated evidences are always maintained perfectly. The assessee has obtained accommodation entry only to inflate the expenses and to reduce the ultimate profit. No stocks of diamonds were found at the time of search on Bhanwarlal Jain Group. The assessee has shown a very meagre gross profit (GP) @ 0.78% and not net profit (NP) at 0.02%. The ld. CIT(A) restricted the addition to the extent of 12.5% which is on the lower side. The ld. CIT-DR for the revenue prayed that disallowance made by the AO may be upheld or in alternative submitted that it may restricted at least @ 25%, keeping in view that the NP declared by the assessee is extremely on lower side. 13. On the validity of reopening, the ld.CIT-DR for the revenue submits that the AO received credible information about the accommodation entry provided by Bhanwarlal Jain Group. The assessee is one of the beneficiaries, who had availed accommodation entries from such hawala trader. At the time of recording reasons, the mere suspicious about the accommodation entry is sufficient as held by Hon'ble jurisdictional High Court in various cases. To support his submissions, the ld.CIT-DR relied upon the decision;  Pushpak Bullion (P) Ltd Vs DCIT [2017] 85 taxmann.com 84(Gujarat High Court),  Peass Industrial Engineers (P) Ltd Vs DCIT [2016] 73 taxmann.com 185 (Gujarat High Court),  ITO Vs Purushttom Dass Bangur [1997] 90 Taxman 541 (SC) and  Mayank Diamond Private Limited (2014) (11) TMI 812 (Gujarat High Court).  AGR Investment Vs Additional Commissioner 197 Taxman 177 (Delhi) and  Chuharmal Vs CIT [1998] 38 Taxman 190 (SC). 14. On the other hand, the ld.AR of the assessee submits that he has challenged the validity of reopening as well as restricting the addition to the extent of 12.50% of the alleged bogus purchases. The ld.AR of the assessee submits during the assessment, the AO has not made any independent investigation. The AO reopened the case of the assessee on the basis of third party information without making any preliminary investigation. The AO received vague information about providing accommodation entry by Bhanwarlal Jain Group. No specific information about the accommodation entry obtained by assessee was received by AO. There is no live link between the reasons recorded qua the assessee. Therefore, the re-opening is invalid and all subsequent action is liable to be set aside. 15. On account of additions of bogus purchases, the ld.AR submits that in the original assessment, the assessee filed its complete details of purchases to prove the genuineness of expenses. The AO accepted the same in the assessment order passed under section 143(3) on 10.03.2009. During re-assessment, the assessee again furnished complete details about the genuineness of purchases. The assessee filed confirmation purchases invoices, accounts of the parties, bank statement of assessee showing transaction to the banking channel. The AO has not made any comment on the documentary evidence furnished by assessee. The AO solely relied upon the statement of third party and the report of Investigation Page | 8 512/SRT/2019/AY.2013-14 Saket Impex Wing. The report of wing and the statement of Bhanwarlal Jain were not provided to the assessee. The AO has not disputed the sales of assessee. No sale is possible in absence of purchase. The books of accounts were not rejected. The AO made the disallowance of entire purchases. The assessing officer not provided cross examination of the alleged hawala dealers. The disallowances sustained by the Ld. CIT(A) @ 12.5% of the impugned purchases, is on higher side and deserve to be deleted in total. The ld.AR of the assessee submits that entire purchases shown by assessee are genuine. In without prejudice and alternative submissions, the Ld. AR for the assessee submits that in alternative submission, the disallowance may be sustained on reasonable basis. To support his various submission, the ld.AR for the assessee is relied upon case laws: 1 M/s Andaman Timber industries VsCommissioner of Central Excise, CIVIL APPEAL NO. 4228 OF 2006 (Supreme Court) 2 CIT vs. Indrajit Singh Suri [2013] 33 taxmann.com 281 (Gujarat) 3 Albers Diamonds Pvt. Ltd. Vs ITO 1(1)(1), Surat I.T.A. No.776 &1180/AHD/2017 4 The PCIT-5 vs. M/s. Shodiman Investments Pvt. Ltd. TTANO. 1297 OF 2015 (Bombay High Court) 5 ShilpiJewellers Pvt. Ltd. vs. Union of India &Ors. WRIT PETITION NO. 3540 OF 2018 (Bombay High Court) 6 CIT in Vs. Mohmed Juned Dadani 355 ITR 172 (Gujarat) 7 Micro Inks Pvt. Ltd. Vs. ACIT [2017] 79 taxmann.com 153 (Gujarat) 8 Shakti Karnawat Vs. ITO - 2(3)(8), Surat ITA 1504/Ahd/2017 and 1381 /Ahd/2017 9 Asian Paints Ltd. Vs. DCIT, [2008] 296 ITR 90 (Bombay) 10 PCIT, Surat 1 Vs. Tejua Rohit kumar Kapadia [2018] 94 taxmann.com 325 (SC) 11 The PCIT-17 vs. M/s Mohommad Haji Adam & Co. ITA NO. 1004 OF 2016(Bombay High Court) 12 Pankaj Kanwarlal Jain HUF Vs. ITO 2(3)(8) Surat ITA.No.269/SRT/2017 16. In the rejoinder submissions the ld. CIT-DR for the revenue submits that that rigour of the rules of evidence contained in the Evidence Act is not applicable before the tax authorities. It was submitted that the ratio of various case laws relied by the ld. AR for the assessee is not applicable on the facts of the present cases. The ratio of decision of Hon’ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. 17. We have considered the submissions of the parties and have gone through the order of the lower authorities. We have also deliberated on each and every case laws relied by both the parties. We have also examined the financial statement of all the assessee(s) consisting of computation of income and audit report. We have also gone through the documentary evidences furnished in all cases. Ground No.1 in assessee’s appeal relates to the validity of reopening. The ld AR for the assessee vehemently argued that the AO reopened the case of the assessee on the Page | 9 512/SRT/2019/AY.2013-14 Saket Impex basis of third party information, and without making any preliminary investigation, which was vague about the alleged accommodation entry by Bhanwarlal Jain Group. And that there was no specific information about the accommodation entry availed by the assessee. There is no live link between the reasons recorded qua the assessee. We find that the assessee has raised objection against the validity of the reopening before the AO. The objections of the assessee was duly disposed by AO in his order dated 09.02.2015. The assessee raised ground of appeal before ld CIT(A) while assailing the order of AO on reopening. The ld CIT(A) while considering the ground of appeal against the reopening held that the AO has received report from investigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report the AO has reason to believe that the income of the assessee has escaped assessment and thus the action of AO in reopening is justified. 18. We find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of similar notice of reopening, which was also issued on the basis of information of investigation wing that they have searched a person who is engaged in providing accommodation entries, held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon’ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon’ble High Court, we find that the assessing officer validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd clearly held that when assessing officer received information from the investigation wing that two well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified. Hence, the ground No. 1 in assessee’s appeal is dismissed. 19. Ground No. 2 in assessee’s appeal and the grounds of appeal raised by the revenue are interconnected, which relates to restricting the disallowance of bogus purchases to the extent of 12.5%. The AO made of 100% of purchases shown from the hawala dealers/ entry provider namely Bhanwarlal Jain. We find that the AO while making additions of 100%, of disputed purchases solely relied on the report of the investigation wing Mumbai. No independent investigation was carried by the AO. The AO has not disputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ld CIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ld CIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the Page | 10 512/SRT/2019/AY.2013-14 Saket Impex observation that the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld CIT(A) by considering the overall facts, concluded that the 100% disallowance of purchase is not justified. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO made disallowance of entire bogus purchase and on first appeal before CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld.CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee’s are more than 5%. However, in the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld. CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs. 66,09,62,458/-. The assessee has shown Gross Profit @ .78% and net Profit @ .02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs.1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs, 4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/ material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the ld CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon’ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon’ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs. 1.86 Crore. The disputed transaction in the said case was Rs. 1.68 Crore. However, in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed. 22. In the result the appeal of revenue is dismissed and the appeal of the assessee is partly allowed.” Page | 11 512/SRT/2019/AY.2013-14 Saket Impex 13. As the issue is squarely covered by the judgment of the Co-ordinate Bench in the case of Pankaj K. Chaudhary (supra) wherein Tribunal held that in respect of bogus purchases, the addition @ 6% of bogus purchases is fair and reasonable. There is no change in facts and law and Ld. DR for the Revenue unable to produce any material to controvert the above findings of the Co-ordinate Bench (supra). Therefore, respectfully following the judgment of the Co-ordinate Bench in the case of Pankaj K. Chaudhary (supra), we direct the Assessing Office to make addition @ 6% of bogus purchases. 14. In the result, appeal filed by assessee is partly allowed. Order is pronounced in the open court on 20/09/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 20/09/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat