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2024 (4) TMI 1074 - ITAT MUMBAIEstimation of income - Bogus purchases - Second reopening assessment proceedings - addition @ net profit of 5.76% of the total annual turnover of the assessee has been estimated by CIT – A under first reopening assessment - in this second reassessment proceedings further information was received that assessee has further obtained purchases from suspicious dealers - addition made on the basis of information received from Sales Tax Department, Maharashtra - Whether the addition is required to be made of alleged bogus purchases at the rate of hundred percent or the addition is subsumed in net profit rate already assessed in first reopening assessment? HELD THAT:- It is an established principle that in case of such bogus purchases only profit embedded there in should be charged to tax if such purchases have resulted into sales. In this case the alleged bogus purchases are only Rs. 11,58,195 whereas the already sustained addition is of ₹ 5,047,947/–. Thus, according to us the learned CIT – A is correct in not making any further addition to the total income of the assessee on account of alleged bogus purchases of ₹ 1,158,195/– for which the impugned reassessment order is passed. Accordingly we confirm the order of the learned CIT – A. Accordingly, both the grounds raised by the learned assessing officer are dismissed.
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