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2017 (7) TMI 101 - AT - Income TaxBogus purchases - GP determination - AO made the disallowance @18% whereas Ld. CIT(A) has reduced it to 12.5%. - Held that:- The assessee has been able to show that purchases made have been sold and sales have been accepted. But when the need arose for confirmation of the transaction, it is noted from the facts of this case that assessee was not able to confirm the transaction beyond doubt. Therefore, even if it is proved that purchases have been made, but the correctness of the amount at which these purchases have been shown is not fully substantiated. Taking all the rate of disallowance adopted by Ld.CIT(A) @12.5% should be reduced to 8%. The AO is directed to grant relief accordingly. We may clarify that this rate has been adopted after taking into account the peculiar facts and circumstances of this case and, therefore, should not be taken as a precedent in any other case as any yardstick. With these directions, appeal filed by the assessee is partly allowed.
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