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2017 (12) TMI 1392 - AT - Income TaxBogus purchases - estimation of income - Held that:- In the case of CIT vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. That being the position, not the entire purchase price but only the profit element embedded in such purchases can be added to the income of the assessee. As mentioned hereinbefore the assessee failed to substantiate his claim of expenditure of ₹ 2,25,72,581/- made from 30 parties in AY 2009-10; ₹ 2,43,30,038/- from 20 parties in AY 2010-11 and ₹ 2,81,43,532/- from 41 parties in AY 2011-12. Having regard to the above, we direct the AO to estimate profit @ 12.5% of the above purchases for the impugned assessment years. - Decided partly in favour of assessee.
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