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2019 (4) TMI 1878 - AT - Income TaxBogus purchases - assessee failed to conclusively substantiate the delivery of material - HELD THAT:- Notices issued u/s 133(6) to all the suppliers did not elicit satisfactory response. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which lower authorities have rightly done. Assessee is dealing in a low margin item like metals which is subjected to lower VAT Rate. Another factor to be noted is that the assessee has reflected a Gross Profit Rate of 3.84% in the impugned AY. Keeping in view the totality of facts and circumstances, we reduce the estimated additions to 2% of alleged bogus purchases - Decided partly in favour of assessee.
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