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2017 (8) TMI 1311 - AT - Income TaxAddition @ 4.92% of total purchases from hawala parties - purchase from grey market - Held that:- We are convinced with the arguments of the revenue that the assessee has failed to discharge the primary onus of proving the purchases and it could not produce evidences to show actual delivery of material and also could not produce confirmatory letters from the alleged bogus suppliers. However, we also find that the assessee is in possession of purchases invoices and the payments are through banking channels. Therefore, even if all the purchases are found to be bogus, we note that sales turnover has not been disputed by the revenue. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases which CIT(A) has rightly done. Therefore, we confirmed the order of CIT(A).
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