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2017 (10) TMI 523 - AT - Income TaxBogus purchases - G.P. determination - Held that:- When sales are not doubted hundred percent disallowance for bogus purchase is not possible. This has been so held by honourable jurisdictional High Court in the case of Nikunj Eximp enterprises [2013 (1) TMI 88 - BOMBAY HIGH COURT]. However we also note that facts of the case before the jurisdictional High Court were different from that in the present case. Facts of the present case clearly indicate that assessee has engaged in transaction in the grey market. Making transactions in the grey market gives the assessee savings of taxes etc at the expense of Exchequer. In similar situation following the honourable Gujarat High Court decision in the case of Simit P Seth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) disallowance of 12.5% of the bogus purchase has been found to be meeting the end of justice in a number of cases at the Mumbai tribunal. Accordingly, we modify the order of learned CIT-A and hold that the disallowance in this case should be made at the rate of 12.5% of the bogus purchase
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