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2019 (4) TMI 856 - ITAT MUMBAIBogus purchases - assessee purchased goods from certain dealers, who have been identified as hawala dealers by the Sales tax department of Government of Maharashtra - profit estimation - G.P rate of 12.50% estimated by the Ld CIT(A) - HELD THAT:- We notice that the assessee has taken all possible steps and produced relevant documents to prove the genuineness of purchases made from M/s RTIL. On the contrary, the various evidences furnished by the assessee has not been disproved by the assessing officer. Hence the view taken by the AO was not based on any material. A.R furnished a chart showing the G.P rate earned on the purchases made from M/s RTIL, G.P rate earned from other purchases and overall G.P rate declared by it. We notice that the overall G.P rate declared by the assessee is 0.10%, while the G.P rate declared on purchases made from M/s RTIL and others was 0.06% and 0.11%. We notice that the assessee is operating on low margin and hence the G.P rate of 12.50% estimated by the Ld CIT(A) is very much on the higher side. There is no material to substantiate the view taken by the AO and hence the entire addition should be deleted. However, the assessee has not cited any reason as to why the G.P rate on purchases made from M/s RTIL is lower than that earned from other purchases. Hence, in order to put this issue at rest, we modify the order passed by Ld CIT(A) on this issue and direct the AO to estimate the G.P on purchases made from M/s RTIL at 0.11% , i.e., the rate of G.P, the assessee earned from other purchases and sustain the addition to that extent. - Decided partly in favour of assessee.
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