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2016 (6) TMI 293 - AT - Income TaxBogus purchases - investigation conducted by the Sales Tax Department - CIT(A) was of the view that the estimation of profit on such bogus purchases has to be made @ 10.41% instead of 12.5% adopted by the AO - Held that:- The assessee in the course of assessment proceedings has produced documentary evidence to prove the genuineness of the purchases. It is also not disputed that the Assessing Officer has accepted the sales turnover disclosed by the assessee. Therefore, unless, the assessee had made purchases he could not have effected corresponding sales. Therefore, before treating the purchases made by the assessee as bogus, the Assessing Officer should have conducted necessary enquiry keeping in view the aforesaid fact. Without conducting any enquiry, the Assessing Officer solely relying upon the investigation made by the Sales Tax Department cannot make the addition, that too, on the basis of untested material. Therefore, we are of the view, the addition made on account of estimation of profit by treating the purchases as bogus has no legs to stand. Accordingly, we delete the same. - Decided in favour of assessee
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