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2019 (6) TMI 1050 - AT - Income TaxAddition of non-genuine purchases - assessee has declared GP @ 5.02% - assessee is dealing in ferrous and non ferrous steel - HELD THAT:- It is settled position that no sale is possible in absence of purchases. The total turnover of assessee during the year was of ₹ 2.56 Crore. The assessee has shown the purchase of ₹ 2.29 Crore and has declared the income of ₹ 94,741/-. The assessee has already declared GP @ 5.09%. Therefore, after considering the facts and the nature of business of the assessee, particularly, when the sales of the impugned purchases were not disputed, and that the assessee has already shown GP of 5.09%% on such purchases, we are of the considered opinion that under Income Tax Act only real income can be taxed by the Revenue. Even if the transaction is not verifiable, the only taxable is the taxable income component and not the entire transaction - in order to fulfill the gap of revenue leakage the disallowance of reasonable percentage of such purchases would meet the end of justice. Hence, the addition is restricted to 12.5% of the total impugned (disputed) purchases. See SHRI HARIRAM BHAMBHANI [2015 (2) TMI 907 - BOMBAY HIGH COURT] - Decided partly in favour of assessee.
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