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2017 (12) TMI 1759 - ITAT MUMBAIValidity of reassessment proceeding - Bogus purchases - CIT(A) directed the AO to restrict the addition to 3% of the value of purchases - HELD THAT:- No dispute with regard to the fact that the assessee has correlated the purchase quantity with a particular sales/export, meaning thereby, the goods have reached the hands of the assessee. When the goods have reached, it may not be proper to disallow entire amount of purchases, since the assessee could not have sold the goods without purchasing the same. CIT(A) has taken the support of the decision of Simit P Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] and also Sanjay Olicake Industries [2008 (3) TMI 323 - GUJARAT HIGH COURT] to come to the conclusion that the profit element embedded in the purchases could be assessed. Since the purchases have been made from a group, which had taken a different stand, the Ld CIT(A) took the view that there is possibility of inflation of purchase price, from which the assessee could have made profit. The said profit was estimated at 3% on the basis of Benign Assessment procedure guidelines and the Transfer Pricing adjustments generally made. The decision so reached by Ld CIT(A) cannot be found fault with - Decided against the revenue.
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