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2018 (11) TMI 1840 - ITAT MUMBAIEstimation pf income - Addition u/s. 69C - Bogus purchases - CIT(A) sustaining the addition to 3% of the alleged bogus purchases - assessee has not produced any evidence to demonstrate that the purchases made from the declared sources are genuine and only submission made by the learned AR before us is, the estimated profit on account of alleged bogus purchases should be reduced to the gross profit rate declared by the assessee in subsequent assessment years - HELD THAT:-The aforesaid submission of the learned AR is not acceptable. It is a fact on record that the assessee has failed to prove the purchases from the declared sources, which in other words demonstrates that the assessee has purchased the goods/diamonds from unknown sources/grey market, thereby, avoiding payments of VAT and other taxes, as may be applicable to such transactions. Thus, to that extent the assessee has suppressed his actual profits. The gross profit rate declared by the assessee under normal circumstances cannot be applied to unproved purchases. After considering the overall facts and circumstances of the case, we are of the considered opinion that learned CIT(A) is more than reasonable in estimating the profit on the bogus purchases @3%. Therefore, we are not inclined to interfere with the aforesaid decision of the learned CIT(A). Accordingly, the grounds raised are dismissed.
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