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2018 (12) TMI 1643 - AT - Income TaxUnexplained purchases - AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties - HELD THAT:- CIT(A) has confirmed entire addition of bogus purchases made by AO, which according to us is on higher side going by the nature of business of the assessee i.e. trading of all types of castings. We are in full agreement with the contentions raised by the assessee before CIT(A) and according to us a profit rate of 12.5% is quite reasonable as assessee has also paid the VAT element on these bogus purchases. Hence, we direct the AO to recompute the income after applying profit rate at the rate of 12.5% and compute the income accordingly. - Appeal of the assessee is partly allowed.
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