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2017 (12) TMI 1409 - AT - Income TaxAddition of bogus purchases - G.P. rate determination - Held that:- We find the decision of the jurisdictional High Court in the case of Nikunj Eximp Enterprises Pvt. Ltd., (2013 (1) TMI 88 - BOMBAY HIGH COURT) is relevant for the proposition that while accepting the sales, rejecting the bogus purchases entirely and making entire addition is not in tune with the principles of making sustainable assessment. GP rates of the assessee are never consistent. They are varying from 7.59% to 23.5%. Therefore, there is requirement of garnering the GP rates of the other years may be subsequent to the year under consideration as well before coming to the correct conclusion relating to the GP rates of the assessee. If necessary, there is a requirement of gathering the GP rates of the businesses of similar nature from the open market and make use of the relevant data for arriving at appropriate GP rate in this line of the business of the assessee. As such, there are various decisions against making of entire bogus purchases as additional income of the assessee. AO is directed to examine all these angles meticulously, i.e. appropriate GP rate, applying the rates of various decisions cited above, the finding of the Settlement Commission in case of the sister concerns and the profits offered by the assessee on this discovery of bogus purchases etc., and grant reasonable opportunity of being heard to the assessee in the remand proceedings. - Decided in favour of assessee for statistical purposes.
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