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2019 (12) TMI 593 - AT - Income TaxBogus purchases - AO has made addition towards 12.50% profit on alleged bogus purchases, on the ground that the assessee is one of the beneficiary of accommodation entries of bogus purchase bills issued by Hawala dealers - CIT(A) has scaled down addition to 8.80% profit on total alleged bogus purchase - HELD THAT:- In this case, the assessee is in the business of manufacturing and trading in playwood and other wood products. The assessee had declared 3.70% gross profit in regular books of accounts including on alleged bogus purchases. Further, the assessee claims that the ITAT, Mumbai Bench in case of Vaishali Prakash Muni vs. ITO [2018 (4) TMI 1202 - ITAT MUMBAI] had considerd an identical issue and considering facts has directed the AO to estimate 2% profit on alleged bogus purchases. The assessee further claims that fact of its case is identical to facts of case considered by the Tribunal in case of Vaishali Prakash Muni vs. ITO(Supra) and hence requested to estimate 2% profit on alleged bogus purchases. We, therefore, considering facts and circumstances of this case and consistent with view taken by the Coordinate Bench in number of cases, including in the case of Vaishali Prakash Muni vs. ITO (Supra) direct the Ld.AO to estimate 2% profit on alleged bogus purchases. Accordingly, we direct the AO to reduce additions to 2% profit on alleged bogus purchases. - Decided partly in favour of assessee.
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