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2018 (2) TMI 1785 - ITAT MUMBAIBogus purchases - Disallowance of approximately 15% as against 100% disallowed by the AO - Held that:- CIT(A) sustained the addition partially at 15% of the total purchases by observing that the assessee has estimated the profit on WIP @5% which is low and thus justified sustaining of disallowance at 15%. However, in similar type of cases the Coordinate Benches have taken a view that the percentage addition should be made ranging from 2 to 12.5% depending upon the facts and circumstances of the case in order to bring to tax the savings which the assessee has made by the reason of purchase of goods from grey market when the sales/consumption is undisputed. In the present case the sales were not disputed and the method of accounting followed by the assessee is project completion, therefore, we are inclined to estimate the profit on the above purchases at 3%. Accordingly appeal of the assessee is partly allowed.
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