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2016 (9) TMI 1589 - AT - Income TaxEstimation of income - bogus purchases - CIT-A confirmed the addition to the extent of 25% - HELD THAT:- In different trade items, there may be different rate of profit. Whenever any profit is being estimated, the element of guesswork would always be involved. In the case Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT]on an analysis of the material, Tribunal drew an inference that in the trade of steel profit at the rate of 12.5% may be reasonable profit when the assessee has procured material from different sources and bills from different sources. This formation of opinion was not disturbed by the Hon’ble High Court. Therefore, we find force in the contentions of the ld.counsel for the assessee that this decision is a guiding factor for estimating element of profit involved in the activity of the assessee. We allow the appeal of the assessee partly, and modify the order of the ld.CIT(A). Additions confirmed by the ld.CIT(A) at the rate of 25% of the total bogus purchases is restricted to 12.50% - Decided partly in favour of assessee.
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