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2018 (3) TMI 1894 - AT - Income TaxEstimation of income - Disallowance of bogus purchase - CIT(Appeals) sustaining 25% disallowance of the bogus purchase - HELD THAT:- Sales in this case have not been doubted. As held by the Hon'ble jurisdictional High Court Nikunj Eximp Enterprises [2014 (7) TMI 559 - BOMBAY HIGH COURT]that when sales are not doubted, hundred percent disallowance of purchasers as bogus is not permissible. Facts of that case were a little different inasmuch as the sales-was to the government departments. Be as it may, we find that in this case, the facts of the case indicate that assessee has engaged into the grey market for making purchases. Making such purchases gives the assessee various benefits in the form of tax saving etc at the expense of Exchequer. In similar facts and circumstances following the decision of Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT]a disallowance of 12.5% has been held to be meeting the end's of justice in various decisions of the ITAT Mumbai in such cases. Accordingly, we hold that in the present case the disallowance should be restricted to 12.5% of the bogus purchase.
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