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2016 (5) TMI 1463 - ITAT INDOREAddition on account of peak credit - AO to apply gross profit @ 10% - Held that:- As gone through the order of Jurisdictional High Court in the case of CIT vs. Jagdishchandra Vishwakarma [2011 (2) TMI 1508 - MADHYA PRADESH HIGH COURT] wherein the facts are that all the payments were made through account payee cheques, but assessee could not produce the seller. Therefore, in that case, the Tribunal had held that if all the payments have been made through account payee cheques, the purchase cannot be termed as bogus. In the instant case, the facts are not identical but in this case, the AO has not made any enquiry to prove that the money given by the assessee to Jai Deep Trading Company has returned back to the assessee, though the assessee has denied to make any bogus purchases from the above party. AO and CIT(A) is not justified in his action. In the result, the appeal of the assessee is partly allowed and we reverse the finding of the CIT(A) and we delete the addition on account of peak credit. We also direct the AO to apply gross profit @ 10%. - decided against revenue.
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