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2018 (12) TMI 751 - AT - Income TaxBogus purchases - estimation of profit - Held that:- Profit at the rate of 5% on such transaction has been estimated and added to the total income of the assessee. Similarly, in the case of Ganesh Industries [2018 (10) TMI 739 - ITAT AHMEDABAD] we have considered similar issue, wherein we estimated GP at 5% to 6% on these transactions, because the assessee had already disclosed GP on the alleged bogus purchases at 14.27% in that case. In the present case also, the assessee has already offered profit at 5%. It has shown the income on these purchases at ₹ 15,29,625/-. If we further estimate profit at 5% that will meet ends of justice. It takes care of avoidance of payment of tax etc. and earning of extra profit. Therefore, we partly allow this ground of appeal and direct the AO to estimate profit at 5% (five percent) over and above profit disclosed by the assessee on these alleged bogus purchase. In other words, addition of ₹ 15,29,625/- more would be added to the total income of the assessee. In view of the above discussion, this ground of appeal is partly allowed.
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