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2016 (10) TMI 700 - AT - Income TaxGP addition @ 12.5% of the suspected purchases - Held that:- Sales account is undisturbed, presumption of purchase of goods outside the books and also without bills, procuring the purchase bills from the hawala bill providers etc. Undoubtedly, the assessee is engaged in the construction activity and GP rate 12.5% is not uncommon. In the cited judgment, the addition @ 12.5% of the suspected purchases was confirmed by the Hon’ble High Court in the case of CIT vs. Nikunj Eximp Enterprises Pvt [2013 (1) TMI 88 - BOMBAY HIGH COURT ] when the recorded profit of the assessee – Simit P Sheth (supra) is only @ 3.56%. Considering the above, we find, the CIT (A) is justified in adopting 12.5% of the suspected purchases for addition. Therefore, in our opinion, the order of the CIT (A) on this issue is fair and reasonable and it does not call for any interference.
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