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2018 (9) TMI 1982 - AT - Income TaxBogus purchases - AO restricted the addition to 12.5% Kanak Steel India being the profit element embedded in nongenuine purchase also confirmed by CIT-A - only submission of assessee that he has paid VAT on the alleged bogus purchases, therefore, even if the profit element on the alleged bogus purchases is estimated at 12.5% but the VAT amount paid by the assessee should be reduced from such profit - HELD THAT:- Assessee should get the benefit of VAT paid on the purchases held to be nongenuine by the Assessing Officer. Accordingly, direct the Assessing Officer to verify the payment of VAT by the assessee and reduce it from the addition made of ₹ 1,15,990 and sustain addition to the extent of the balance amount. This ground is partly allowed. Levy of interest u/s 234C - HELD THAT:- Levy of interest is mandatory and consequential. Suffice to say, interest under section 234C of the Act has to be charged on the basis of income returned by the assessee.
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