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2019 (12) TMI 368 - ITAT MUMBAIReopening of assessment u/s 147 - Bogus purchases - assessee suo moto informed that the actual purchase from these two parties - HELD THAT:- As disclosed profit rate at the rate of 9.61% on the turnover of ₹6,50,58,621/- and there is no dispute whatsoever noted by the AO or CIT(A) in their respective orders. AO has already disclosed the gross profit amounting to ₹62,54,161/- but the purchase from the parties are to the tune of ₹1,50,25,860/- which are included in the total turnover of the assessee. Assessee itself declared the profit rate at the rate of 9.69% but the purchase made from these suspected parties on which profit accounted for is only to the tune of ₹ 9.69% but in our view the profit rate in the case of bogus purchase or purchase made from suspected parties should have been at the rate of 12.5%. Hence, we direct the Assessing Officer to restrict the addition being differential amount as profit at the rate of 12.5% minus (-) 9.61% on the bogus purchases or purchases from suspected parties amounting to ₹ 1,50,25,860/- only. There is no defect in the books of accounts but since, there is element of bogus purchase which we have already considered and no other addition can be made. We direct the Assessing Officer to re-compute the income in view of the above directions. The appeal of the assessee is partly allowed.
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