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2019 (10) TMI 712 - ITAT MUMBAIBogus purchases - HELD THAT:- No sale without actual purchase of material keeping in view the assessee’s nature of business. As noted by lower authorities, the assessee was in possession of primary purchase documents and the payments to suppliers were through banking channels. The sales turnover reflected by the assessee has not been disturbed / disputed by AO. At the same time, the assessee miserably failed to substantiate the purchases during assessment proceedings and could not produce any of the suppliers to confirm the transactions. Under such circumstances, the additions which could be sustained, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which Ld. first appellate authority has rightly done. However, finding the estimated rate to be on the higher sider, we reduce the same to 12.5% of alleged bogus purchases. The same comes to ₹ 1,43,821/-. The balance addition stands deleted. The impugned order stand modified to that extent. Appeal stands partly allowed.
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