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2017 (5) TMI 244 - AT - Income TaxAddition made towards bogus purchases - Held that:- There is no material on record to conclusively prove that the purchases made by the Assessee are bogus purchases and nothing is brought on record to suggest that the information gathered by the Sales Tax department conclusively proves that the dealer is providing only the accommodation entries to the Assessee before us. Thus we hold that addition made towards bogus purchases cannot be sustained. At the same time, keeping in view the nature of business of the Assessee and possibility of the Assessee making local purchases without any transportation bills, delivery challans etc., and the possibility of the Assessee making purchases in grey market on cash cannot be ruled out. Therefore, keeping in view the facts and circumstances of the case, we direct the Assessing Officer to disallow 12.5% of the above purchases to meet the anomalies and to cover up the leakage of revenue and not the entire purchases.
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