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2018 (2) TMI 1955 - AT - Income TaxBogus purchases u/s 69C - closing WIP in respect of certain purchases alleged as bogus - HELD THAT:- Average cost per sq.ft. of assessee ₹ 2,812.87/- per sq.ft. is equivalent to its associate concern M/s. Triveni Properties with project in the same vicinity having average cost as ₹ 2,907/-per sq. ft. Since, no allegation on purchases of said associate concern was made by the department, the average cost per sq. ft. of the assessee is to be accepted. Therefore, there is no question of any inflation of cost or deflation of profit. The assessee had been following Project Completion method since its inception. Though the AO had adopted percentage completion ( method for A.Y. 2008-09 to AY 2011-12, the Id. CIT(A) had deleted the addition in this respect for A.Y. 2008-09 to A.Y. 2010-11. The revenue's appeal for A.Y. 2008-09 and A.Y. 2009-10 was dismissed being below the prescribed tax limit. The revenue is not in appeal against the said deletion for current A.Y. i.e. 2010-11. Thus, project completion method followed by the assessee has been accepted by the revenue. It was submitted by the assessee that since no expenditure/deduction was claimed by the assessee for the year under consideration, no disallowance should be made for the year under consideration based on the decision of the on’ble Mumbai ITAT in the case of M/s. Maruti Impex v. JCIT [2016 (5) TMI 104 - ITAT MUMBAI] & Savala Associates v. ITO [2009 (10) TMI 640 - ITAT MUMBAI] We uphold addition to the extent of 2% of such bogus purchases during the A.Y.2012-13.
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