Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 717 - AT - Income TaxReopening of assessment - bogus purchases - Held that:- In the instant case there was specific information before the AO from the Sales Tax Department, Maharashtra about the assessee who obtained bogus purchase bills from the accommodation entry providers. Therefore, the AO has rightly reopened the assessment by issuing notice u/s 148 of the Act. Profit estimated fro bogus purchases - Held that:- We find that to ascertain the genuineness of the unverifiable purchases, the AO called for information u/s 133(6) from the five parties. The letters were returned back by the postal authorities unserved with the remarks ‘not known’. The AO then asked the assessee to produce the above parties for examination in person to establish their identity and substantiate the claim of purchases from those parties. The assessee however, failed to produce those parties for examination in person. Also we find that barring the ledger account and cheque payments, no other documents such as octroi receipts, transport bills were produced before the AO by the assessee during the course of assessment proceedings. In the case of CIT vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT), has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to the income of the assessee. That being the position, not the entire purchase price but only the profit element embedded in such purchases can be added to the income of the assessee. Thus we estimate @ 12.5% the profit embedded in the said bogus purchases. Disallowance of the other expenses to 5% - CIT(A) has restricted the disallowance on the reason that the appellant had maintained the verifiable vouchers and payment had been made through banking channels in majority of cases, except petty expenses - Held that:- We find that the above estimated disallowance is not supported by the material on record. Therefore, the disallowance of ₹ 1,40,395/- for the AY 2010-11 and ₹ 2,00,162/- for AY 2011-12 arrived at by the Ld. CIT(A) are deleted.
|