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2016 (7) TMI 1507 - AT - Income TaxBogus purchases - CIT(A) upholding the disallowance of 25% - HELD THAT:- CIT(A) had not given any basis for upholding the addition of 25% of the purchase amount treated as bogus by the AO. However, trading results of the assessee have not been disturbed nor books of accounts have been rejected. The GP rate disclosed by the assessee in the assessment year 2009-2010 was 4.73%, wherein assessment year 2010-11 was 3.72. There is increase of 33% in the sales amount during the year under consideration. The sales has increased from 16.62 crores to 21.83 crores during the year. Increase in sales reduces the net profit margins slightly , therefore, keeping in view the GP rate of 3.72% in earlier year as well as increase in turn over during the year under consideration, we direct the AO to restrict the addition by applying the GP rate of 3.50% in place of 3.44% shown by the assessee. - Decided in favour of assessee partly.
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