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2017 (9) TMI 307 - AT - Income TaxAddition u/s 69 to the extent of GP ratio - Information received from sales tax department in respect of bogus purchases- element of profit embedded in bogus purchases which the assessee would have made - Held that:- Assessee company being a trader of goods, AO not having doubted the genuineness of sales, could not have gone ahead and made addition in respect of peak balance on such purchases. When the corresponding sales have not been doubted and the quantitative details of purchases and sales vis-a-vis stock was available, we deem it appropriate considering the entirety of facts and circumstances of the case to restrict the addition to the extent of 2% of such bogus purchase. Accordingly, the order of both the lower authorities are modified and AO is directed to restrict the addition to the extent of 2% on such purchases. - Partly decided in favor of assessee and against revenue.
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