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2017 (9) TMI 1524 - AT - Income TaxBogus purchases - information received from Sales Tax Department regarding suspicious suppliers - Held that:- AO added 100% of such supplies in assessee’s income. By the impugned order CIT(A) restricted the addition by estimating profit to the extent of 12% on such purchases after observing that corresponding sales effected by assessee has not been doubted by the AO. From the record found that AO did not find any inflation in purchase price or inflation in consumption or suppression of production. The goods so purchased from these suppliers were directly delivered by the representative of the suppliers at the factory itself. No octroi was payable as goods were delivered within the limits of Mumbai Municipality. I also found that assessee has shown very good GP rate on the sales affected by it during the year at 25.18% in the A.Y.2010-11 and 23.26% in the A.Y.2009-10. Thus modify both the orders of the lower authorities and direct AO to restrict the addition to the extent of 10% of such bogus purchases. - Decided partly in favour of assessee.
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