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2019 (3) TMI 316 - AT - Income TaxBogus purchases - information received from the Investigation Wing - assessee company was one of the beneficiaries of Hawala transactions routed through the hawala dealers as informed by the Sales Tax (VAT) Department, State of Maharashtra - HELD THAT:- The facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation on the facts and circumstances of the case, 12.5 % disallowance out of the bogus purchases meets the end of justice. However, in this regard the learned counsel of the assessee has prayed that when only the profits earned by the assessee on these bogus purchase transaction is to be taxed the gross profit already shown by the assessee and offered to tax should be reduced from the standard 12.5% being directed to be disallowed on account of bogus purchase.
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