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2017 (10) TMI 231 - AT - Income TaxBogus purchases - Gross profit estimation - Held that:- Bogus purchases and after considering the facts observed that no uniform yardstick can be applied for estimating gross profit on bogus purchases which is dependent upon the facts of different cases. The co-ordinate bench of ITAT, in a number of cases has taken a consistent view and directed the AO to estimate gross profit of 12.5% on alleged bogus purchases. Keeping in view we are of the considered view that estimation of gross profit at 12.5% on total alleged bogus purchases would meet the ends of justice. Therefore, we direct the AO to estimate gross profit at 12.5% on the alleged bogus purchases. We are of the view that the issue needs to be reexamined by the AO in the light of the claim of the assessee that the purchases from Shree Ganesh Trading Co has been taken twice for the purpose of estimation of gross profit. If the claim of the assessee is found to be correct, then the AO is directed to exclude the name of Shree Ganesh Trading Co from the second list of entities considered for estimation of gross profit on alleged bogus purchases. Hence, we set aside the issue for the limited purpose of verification of purchases from Shree Ganesh Trading Co and direct the AO to consider the issue in the light of explanation of the assessee before estimating the gross profit on alleged bogus purchases.
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