Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1564 - ITAT MUMBAIBogus purchases - G.P. rate on purchases - CIT(A) restricting the disallowance to 12% - HELD THAT:- Assessee was a trader of fabrics. A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. No fault could be find with the estimation made by Ld. CIT(A), in this regard. Disallowance of depreciation - HELD THAT:- FAA has erred in noting the factual matrix. The depreciation was disallowed as a matter of consequence since certain capital expenditure incurred by assessee in earlier AY 2009-10 was disallowed and depreciation was disallowed to the assessee in that year. Consequentially, depreciation was disallowed in this year also on the written down value as claimed by the assessee. Therefore, this issue was percolating from AY 2009-10. Therefore, by setting aside the directions of first appellate authority in this regard, we direct Ld. AO to compute the disallowance as per the final outcome of disallowance of capital expenditure in AY 2009-10. The assessee is directed to provide requisite information
|