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2020 (1) TMI 1649 - AT - Income TaxEstimation of income - bogus purchases - CIT(A) sustained addition @12.5% - HELD THAT:- We find that in this case the sales have not been doubted it is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. As decided in Nikunj Eximp Enterprises [2014 (7) TMI 559 - BOMBAY HIGH COURT] upheld hundred percent allowances for the purchases said to be bogus when sales are not doubted. However the facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation in our considered opinion on the facts and circumstances of the case the 12.5 % disallowance out of the bogus purchases done by CIT-A meets the end of justice. Accordingly we uphold the order of learned CIT-A. Decided against revenue.
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