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2015 (11) TMI 20 - AT - Income TaxDisallowance at 11 % Net profit on entire bogus purchases - Held that:- As the assessee had claimed that all the transaction were through banking channels the claim had to be verified to find out the trail of the cheques. It appears that because of time constraint the AO could no complete the inquiries that he had started in right direction. The fact mentioned by the FAA that it is a case of a builder and consumption of goods has not been doubted. In such cases, generally the peak investment is added to the total income of the assessee, as the whole turnover cannot be held to be unaccounted income or investment without supporting evidences. In these peculiar fact and circumstances of the case, we are of the opinion that in the interest of justice the disallowance should be restricted to 11% for the alleged doubtful purchases i.e. ₹ 3.09 Crores or to the peak investment whichever is higher. In short, we are partly reversing the order of the FAA. Effective ground of appeal filed by the AO is rejected. In light of our discussion, CO filed by the assessee is treated as infructuous. - Decided against assessee.
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