Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 766 - AT - Income TaxReopening of the assessment by issuance of notice u/s 148 - Bogus purchases - HELD THAT:- In terms of quantity, the purchases and sales have not been disputed. Only thing disputed by the Revenue is part purchases from the alleged total sales were treated as bogus. It can be examined with a simple example. That the assessee has purchased material from party “A”; obtain bills from party “B”. Since he has not able to prove the purchases from “B”, therefore, the purchases have been treated as bogus. In fact, the material was received by the assessee. If that thing has not been happened, then sales would not have been achieved. Therefore, in these circumstances, only extra element of profit involved in this modus operandi of purchases of goods from party “A” and obtaining bills from “B” is to be worked for treating the income of the assessee. The assessee has already shown gross profit at 7.25% and 7.14%. If extra profit at the rate of 6% is being estimated qua the alleged purchases of ₹ 59,09,015/- and ₹ 26,15,013/- in the AY 2009-10 and 2010-11, then ends of justice would meet. This 6% we have worked out on the basis of our past experience in dealing with such cases, wherein Hon’ble Gujarat High Court has also upheld estimation of profit ranging between 5% to 20% depending on the nature of business and considering undue profit earned by an assessee.
|