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2018 (7) TMI 1723 - AT - Income TaxBogus purchases - profit estimation - Held that:- Hon’ble High Court of Gujarat in the case of CIT Vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) after deliberating at length on the profit element that would be involved in making of purchases by an assessee from the open/grey market, had adopted the same at 12.5% of the aggregate value of such bogus purchases. We are oblivious of the fact that in the absence of supporting documentary evidence the determination of the discounted price at which the goods would have been procured by an assessee from the open/grey market, as in comparison to the price for which the same would be available in the regular market and booked by the assessee in its books of account, would have to be subjected to a process of estimation. In all fairness the extent of inflation of the purchase price by the assessee by procuring bogus purchase bills from the aforementioned parties, as held by the Hon’ble High Court of Gujarat in the case of Simit P. Sheth (supra), can safely be taken at 12.5%.
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