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 1215 - AT - Income TaxBogus purchases - estimating profit - Held that:- We find that the assessee had purchased goods from five parties mentioned in paragraph two, that he had held that suppliers were indulged in issuing bogus bills without supplying the goods, that the AO had not doubted the sales made by the assessee, that he had held that goods were not supplied by the parties that were appearing in the books of accounts of the assessee. Thus, he had not doubted the genuineness of the purchase as such but he had doubt about the parties supplying the goods. In our opinion, in such cases the profit embedded in the transaction could be added to the income of the assessee and the entire purchases cannot be disallowed. We find that the AO had invoked the provisions of section 69C of the Act. But, he has not deliberated upon the issue as to how the provisions of said section were applicable. It is one of the deeming sections and has to be construed strictly. In our opinion, the order of the FAA, estimating the profit at the rate of 12.5% of the total purchases is a better estimate than the estimate made by the AO wherein he had disallowed the hundred percent of the purchases. - Decided against AO.
|