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2017 (10) TMI 770 - AT - Income TaxEstimated additional profit margin at the rate of 12.5% on the alleged tainted purchases - whether the additional estimation @ 12.5% (over and above already declared GP) may be substantially reduced? - Held that:- In the present appeals, the assessee is dealing in soft luggage/bags and has already declared the GP @ 15.82%. Admittedly, there can be no sale without purchases and as canvassed by the Ld. counsel for the assessee even it is admitted that the assessee made purchases from bogus parties still it cannot be ignored that the assessee has already declared the GP @ 15.82%. The Ld. Assessing Officer has further enhanced the addition at the rate of 12.5%, thus, the total GP jumps to 37.87%, which is practically not possible in such type of business. Thus, considering the factual matrix, submissions of the assessee and the material facts, available on record, the additional GP made by the Ld. Commissioner of Income Tax (Appeal) (@ 12.5%) is reduced to 6%, which will safeguard the interest of Revenue. It is worth mentioning that the Ld. counsel of the assessee duly agreed for such reduction. The Ld. Assessing Officer is directed to calculate the disallowance at the rate of 21.82% (15.82% already declared by the assessee plus 6% restricted by us against 12.5% by the Ld. Commissioner of Income Tax (Appeal)). Thus, both the appeals of the assessee are partly allowed.
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