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2017 (1) TMI 1251 - AT - Income TaxBogus purchases - parties were not found at their address - accommodation entries by giving purchase invoices - Held that:- Assessing Officer has not issued any notice for the presence of the parties i.e M/s Nirma Trading Company and Shri Omkar Enterprises. Therefore, we are of the view that the Assessing Officer has not doubted the bank transaction and the Assessing Officer has not made any inquiry whether the bank transaction was genuine or not. We find that in this case the cotton bales are sold by identifying the same lot numbers to various manufacturers by identifying press numbers, the goods have been purchased and ultimately sold, quantity details are maintained and they are reflected in tax audit report u/s 44AB of the Act, hence, if at all the purchases are not found to have been made from these two parties and treated as bogus purchases, the entire addition cannot be made unless there is some evidence in support of the claim that money reached back to the assessee. We find that in the instant case, the Assessing Officer has not doubted the bank transaction. Therefore, we are of the view that the entire addition cannot be made. The only addition which can be made is only NP addition. In the instant case, the assessee has shown NP rate of 1.62% of total turnover. Therefore, we direct to apply Net profit on above purchases at the rate of 6%. - Decided partly in favour of assessee
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