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 1341 - AT - Income TaxAddition on bogus purchases - profit element embedded in the alleged bogus purchases - CIT(A) confirming the addition to the extent of 10% - Held that:- Considering the fact that there is a possibility for the assessee to source the materials at a lower rate also, we are of the view that the profit element embedded in the alleged bogus purchases may be fixed at 8%. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to estimate the profit element at 8% of the value of alleged bogus purchases. As A.R submitted that all the purchases have been included in the Work in Progress, since the concerned project was under construction. In that case, there is merit in the submission of the assessee that the profit amount computed at 8% of the value of alleged bogus purchases should go to reduce the value of work in progress. Accordingly we direct the AO to reduce the profit amount so computed from the value of work in progress, instead of assessing the same during the year under consideration. Appeal filed by the revenue is dismissed and the cross objection of the assessee is partly allowed.
|