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2018 (1) TMI 688 - AT - Income TaxDisallowance of bogus purchases - CIT-A restricting addition applying profit rate at the rate of 12.5% of the total bogus purchases - Held that:- Admittedly, these are bogus purchases but assessee has produced complete reconciliation of purchase and sales and also stock tally. Even the payments are by account payee cheque to this party. Thus even the AO has not doubted the consumption of material purchased and it means that assessee has obtained bogus bill from this party and actually purchased material from grey market at a lesser price and also to avoid VAT payment. CIT(A) correctly applied profit rate at the rate of 12.5% of bogus purchases by following the decision of Hon’ble Gujarat High Court in the case of Smith P Seth vs. CIT (2013 (10) TMI 1028 - GUJARAT HIGH COURT)- Decided against revenue
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